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:
“The ultimate umpire of all things in life is—Fact.”
—Agnes C. Laut (1871–1936)
“For there can be no whiter whiteness than this one:
An insurance man’s shirt on its morning run.”
—Gwendolyn Brooks (b. 1917)
“The mother’s and father’s attitudes toward the child correspond to the child’s own needs.... Mother has the function of making him secure in life, father has the function of teaching him, guiding him to cope with those problems with which the particular society the child has been born into confronts him.”
—Erich Fromm (1900–1980)