Find the initial premium in given case

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Reference no: EM131926117

Question: A 3-year endowment insurance policy on (60) provides for benefits paid at the end of the year of death of: 500 if death occures in the first year (i.e. between time 0 and time 1); 800 if death occurs in the second year; and 100 is death occurs in the third year. In addition there is a pure endowment of 1000 payable at age 63 if (60) is then alive. This is purchased by three annual premiums beginning at age 60. The second premium is double the initial premium and the third premium is three times the initial premium. You are given that q₆₀=0.1, q₆₁=0.2, and q₆₃=0.25. The interest rate is 25% for the first 2 years and 20% after that. Find the initial premium.

Reference no: EM131926117

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