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:
“No self in the mass: the braver being,
The body that could never be wounded,
The life that never would end, no matter
Who died, the being that was an abstraction.”
—Wallace Stevens (1879–1955)
“In taking out an insurance policy one pays for it in dollars and cents, always at liberty to discontinue payments. If, however, woman’s premium is a husband, she pays for it with her name, her privacy, her self-respect, her very life, “until death doth part.””
—Emma Goldman (1869–1940)
“The press and politicians. A delicate relationship. Too close, and danger ensues. Too far apart and democracy itself cannot function without the essential exchange of information. Creative leaks, a discreet lunch, interchange in the Lobby, the art of the unattributable telephone call, late at night.”
—Howard Brenton (b. 1942)