(a) State the most appropriate drivers for the following direct expenses:

(i) New business administration department's salary costs
(ii) Medical examinations for temporary life policies
(iii) Commission payment to direct salesman

(b) Differentiate between initial, renewal and termination expenses.

(c) Mr Howcome, aged 45, buys a whole life assurance policy with a death bene?t of $ 30,000, payable at the end of the year of death. Using AM92 Ultimate Mortality with 4% pa interest, calculate the gross premium payable by Mr Howcome annually in advances for 15 years, allowing for the following expenses:

Initial expenses of $ 278 plus 65% of the annual premium, renewal expenses of $ 70 (incurred throughout life from year 2 onwards) plus 5% of the annual premium (incurred at the time of payment of each premium from year 2 onwards) and claim expenses of 3.5% of sum insured.

(d) Kevin, aged 35, takes out a whole life insurance policy with a death bene?t of $ 50,000, payable at the end of the year of death. If Kevin dies within the next 20 years the policy will pay out $ 10,000 pa from the policy anniversary following his death with the last payment being made on the 20th policy anniversary. Considering the following expenses; (Initial) $ 750 at outset, (Renewal) 4% of each premium on collection and (Termination) $ 500 at the time of his death should this occur in the ?rst 20 years plus 0.5% of the sum insured on payment, calculate the half yearly premium payable throughout Kevin's future lifetime under the AM92 Select Mortality with 4% pa interest.