An insurer issues a 10-year term insurance policy with a sum insured of 1,000,000 to
(50).
You are given the following information:
(i) The sum insured is paid at the end of the month of death.
(ii) Premiums are payable monthly.
(iii) Initial expenses, payable at the start of the contract, are 60% of the
annualized premium.
(iv) Maintenance expenses are 5% of premiums including the first.
(v) Mortality follows the Standard Ultimate Life Table.
(vi) Deaths are uniformly distributed between integer ages.
(vii) i = 0.05
(viii) Premiums are determined using the equivalence principle.
Calculate the monthly premium for this policy.
(A) 150
(B) 160
(C) 170
(D) 180
(E) 190
