300-311 Life Insurance Mathematics

Coordinator:

Prerequisite/s:

Timetable:

Contact:

Objectives:

At the end of this subject, the student should be able to:

• calculate the present value and the accumulated value of a stream of payments using a single rate of interest, taking into account the probability of the payments being made according to a single decrement or a multiple state or multiple decrement model;

• analyse problems involving an equation of value taking into account the probability of the payments being made according to different models;

• define and use Manchester Unity sickness functions as an alternative method to a multiple state model for analysing problems involving sickness and discuss the advantages and limitations of the method;

• define and use straightforward functions involving more than one life;

• define and use simple commutation functions suitable for valuing pension fund benefits and contributions; and

• carry out straightforward profit test of a life insurance product.

Content:

Construction of mortality, sickness, multiple-decrement and similar tables from graduated data; contracts dependent upon marriage, sickness, etc.; joint life and last survivor annuities; contingent assurances; reversionary annuities; valuation of pension benefits; assessment of unit-linked contracts; profit testing.

Assessment: