Assignment On:-
Insurance & Risk Management
Submitted To:
Md. Mosharraf Hossain
Associate Professor University of Dhaka Faculty of Business Studies Department of Management Studies
Submitted by: Md. Wahidud Jaman Tusher Sec-B, Roll-147 16th Batch Course No : MGT-304
Submission Date :- 25/02/2012
1. Calculation of Max Single Premium for 5 year term policy of tk 2000 from the following Information :Age
31 32 33 34 35
No. of Living Insured Person
27800 27480 27189 26929 26717
No. of death during the Insured Period
320 291 260 212 189
Other Information :Present Value of tk 1 at the rate of 3%, First year .970, 2nd year .942, 3rd year .915, 4th year .888, 5th year .862. Calculate the max Single Premium of term policy. Solution :-
Calculation of Net Single Premium for 5 year term policy
Year 1 1 2 3 4 5 Age 2 31 32 33 34 35 No. of Living Insured Person 3 27800 27480 27189 26929 26717 No. of death Policy Total P.V of tk. during the Amount Claim 1 Insured Period 4 5 6=45 7 320 2000 640000 0.970 291 2000 582000 0.942 260 2000 520000 0.915 212 2000 424000 0.888 189 2000 378000 0.862 Total Present Value of death claim = P.V. of death claim 8=67 620800 548244 475800 376512 325836 2347192 tk
Here, The P.V. of total claim=P.V. of total death claim. P.V. of total claim So, the Max Single Premium = No. of insured person 2347192 = 27800 (ANS)
= 84.43 tk
2. Calculation of Max Single Premium for 5 year Pure Endowment policy of tk 1000 from the
following Information :Age
31 32 33 34 35 36
No. of Living Insured Person
35800 35344 34944 34584 34283 34027
No. of death during the Insured Period
456 400 360 301 256 258
Other Information :Present Value of tk 1 at the rate of 2%, First year 0.980, 2nd year 0.961, 3rd year 0.942, 4th year th 0.924, 5 year 0.906. Calculate the max Single Premium of Pure endowment policy. Solution :-
Calculation of Net Single Premium for 5 year Pure endowment policy
Year 1 1 2 3 4 5 Age 2 31 32 33 34 35 No. of Living Insured Person 3 35800 35344 34944 34584 34283 No. of death during the Insured Period 4 456 400 360 301 256 Policy Amount 5 1000 1000 1000 1000 1000 P.V of tk. 1 6 0.980 0.961 0.942 0.924 0.906
Here, in the Pure endowment policy the policy holder only get the policy amount after the maturity of policy which is if one survives the endowment period. So there is no need for total death claim, only the surviving person are going to get the policy amount. So the no of surviving person= (34283-256) = 34027 Since the policy amount will be paid after 5 years so the rate will be 0.906 for 5th year. The Max Single Premium = (3402710000.906) / 35800 (No of living insured person) = 861.13 tk (ANS)
3. Calculation of Max Single Premium for 5 year Ordinary Endowment policy of tk 1000 from
the following Information :Age
31 32 33 34 35 36
No. of Living Insured Person
35800 35344 34944 34584 34283 34027
No. of death during the Insured Period
456 400 360 301 256 258
Other Information :Present Value of tk 1 at the rate of 2%, First year 0.980, 2nd year 0.961, 3rd year 0.942, 4th year th 0.924, 5 year 0.906. Calculate the max Single Premium of Ordinary endowment policy . Solution :-
Calculation of Net Single Premium for 5 year Ordinary endowment policy
Year 1 1 2 3 4 5 Age 2 31 32 33 34 35 No. of Living Insured Person 3 35800 35344 34944 34584 34283 No. of death Policy Total P.V of during the Amount Claim tk. 1 Insured Period 4 5 6=45 7 456 1000 456000 0.980 400 1000 400000 0.961 360 1000 360000 0.942 301 1000 301000 0.924 256 1000 256000 0.906 Total Present Value of death claim = P.V. of death claim 8=67 446880 384400 339120 278124 231936 1680460 tk
Here it is to remembered that ordinary endowment policy is equal to the net premium of term amd pure endowment policies. Here, The P.V. of total claim=P.V. of total death claim. So, the Max Single Premium = Present value of total claim / No. of insured person
= 1680460/35800 = 46.94 tk So the no of surviving person = (34283-256) = 34027 The total Claim after survival = (3402710000.906) / 35800 (No of living insured person) = 861.13 tk So, The Ordinary Endowment policy is = (46.94+861.13) = 908.07. (ANS)
4. Calculation of Max Single Premium for 5 year Ordinary Endowment policy of tk 3000 from
the following Information :Age
32 33 34 35 36 37
No. of Living Insured Person
40500 40120 39764 39464 39176 38931
No. of death during the Insured Period
380 356 300 288 245 212
Other Information :Present Value of tk 1 at the rate of 4%, First year 0.961, 2nd year 0.924, 3rd year 0.889, 4th year th 0.854, 5 year 0.821. Calculate the max Single Premium of Pure endowment policy.
Solution :-
Calculation of Net Single Premium for 5 year Double endowment policy
Year 1 1 2 3 4 5 Age 2 31 32 33 34 35 No. of Living Insured Person 3 40500 40120 39764 39464 39176 No. of death Policy Total P.V of during the Amount Claim tk. 1 Insured Period 4 5 6=45 7 380 3000 1140000 0.961 356 3000 1068000 0.924 300 3000 900000 0.889 288 3000 864000 0.854 245 3000 735000 0.821 Total Present Value of death claim = P.V. of death claim 8=67 1095540 986832 800100 737856 603435 4223763 tk
Here it is to remembered that in Double endowment policy if the life assured dies during the endowment period the basic sum assured is payable and if he survives to the end of the term double of the sum assured is paid. So, the Max Single Premium = Present value of total claim / No. of insured person
= 4223763/40500 = 104.29 tk So the no of surviving person = (39176-245) = 38931 The total Claim after survival = (3893130000.821) /40500 (No of living insured person) = 2367.58
Since the double amount will be paid if the policy holder survive = (2367.582) = 4735.16 tk So, The Double Endowment policy is = (104.29+ 4735.16) = 4839.45 tk (ANS)