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:
“I set forth a humble and inglorious life; that does not matter. You can tie up all moral philosophy with a common and private life just as well as with a life of richer stuff. Each man bears the entire form of man’s estate.”
—Michel de Montaigne (1533–1592)
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—John Dos Passos (1896–1970)
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—Susanne K. Langer (1895–1985)