3 For a whole life insurance on 60 you are given i Mortality

(3) For a whole life insurance on (60), you are given: i. Mortality follows the Illustrative Life Table ii. i = 0.06 iii. The insurance company?s expected expenses, payable at the beginning of the year if the insured is alive, are: . 50 in the first year . 10 in years 2 through 10 . 5 in years 11 through 20 . 0 after year 20 Calculate the level annual expense, payable at the beginning of the year for as long as the insured lives, that is actuarially equivalent to the insurance company?s expected expenses. (Ans 11.46)

Solution