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
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