Find initial premium for a three-year endowment insurance

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Reference no: EM131001121

A 3-year endowment insurance on (60) provides for death benefits payable at the end of the year of death. The death benefit is 1000 for death in the first year, 2000 for death in the second year and 3000 for death in the third year. In addition, there is a pure endowment of 4000 paid at time 3 if the insured is then alive. This is purchased by three annual premiums, beginning at age 60. The first two premiums are equal and the third is double the amount of the initial premium. You are given q₆₀ = 0.10, q₆₁ = 0.20, q₆₂ = 0.25.

The interest rates are 25% for the first 2 years and 100% in the third year. Find the initial premium. Find _kV for k = 1, 2, 3.

Reference no: EM131001121

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