Policy-net single premium

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Reference no: EM13937258

Consider the following policy. A Net Single Premium (NSP) is to pay for a whole life insurance policy to be issued to a person of age x, which provides $10,000 of insurance for the first 20 years, $20,000 of insurance thereafter, plus a return without interest of the NSP if the insured dies in the first 20 years (its returned at the time of death). Using the ideas we’ve developed in the course, derive an expression for the NSP that makes the expected loss equal to zero.

Reference no: EM13937258

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