Life Insurance As A Function of The Life Annuity
The APV of whole-life insurance can be derived from the APV a of whole-life annuity-due this way:
This is also commonly written as:
In the continuous case,
In the case where the annuity and life insurance are not whole life, one should replace the insurance with an n-year endowment insurance (which can be expressed as the sum of an n-year term insurance and an n-year pure endowment), and the annuity with an n-year annuity due.
Read more about this topic: Actuarial Present Value
Famous quotes containing the words life, insurance and/or function:
“Think of the life of the working woman as the decathlon. If you even finish it’s a miracle.”
—Barbara Dale (b. 1940)
“For there can be no whiter whiteness than this one:
An insurance man’s shirt on its morning run.”
—Gwendolyn Brooks (b. 1917)
““... The state’s one function is to give.
The bud must bloom till blowsy blown
Its petals loosen and are strown;
And that’s a fate it can’t evade
Unless ‘twould rather wilt than fade.””
—Robert Frost (1874–1963)