300-310 Actuarial Principles

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Contact:

Objectives:

On completion of this subject the student will be able to:

• analyse simple problems of emerging cost using a single decrement model, which describes the evolution of a population;

• calculate the present value and accumulated value of a stream of payments using a single rate of interest and taking into account the probability of the payments being made;

• define and use annuity functions and assurance functions for a single decrement model, including both select and ultimate functions;

• evaluate the liabilities under a life insurance or annuity contract, in terms of emerging costs and in terms of present values, for the purpose of product pricing, reserving and the calculation of surrender values;

• demonstrate how the emergence of profit on a life insurance or annuity contract depends on the interaction between the pricing basis and reserving basis;

Content:

The application of probability to contingencies of human life; laws of mortality; the life table; select tables; annuities and assurances on single lives; commutation functions; office premiums; accumulations; policy values; extra risks; alterations; cash-flow models for life assurance policies; profit testing.

Assessment: