ESTIMATION NET PREMIUM OF TERM LIFE INSURANCE FROM TABLE ???????? LEE-CARTER (CASE STUDY OF ITALY LIFE TABLES 1950- 2017)
In general, insurance can be interpreted as a form of transfer of financial risk from the insured to the insurer with an agreement agreed upon by both parties. The agreement between the insured and the insurer in insurance produces several insurance products, one of which is term life insurance w...
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| Format: | Final Project |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/73032 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | In general, insurance can be interpreted as a form of transfer of financial risk from
the insured to the insurer with an agreement agreed upon by both parties. The
agreement between the insured and the insurer in insurance produces several
insurance products, one of which is term life insurance which protects the
policyholder (the insured) for a specified period. Based on the principle of
cooperation in life insurance, there is a relationship between rights and obligations,
namely benefit, and premiums. The premium calculation uses the probability of
death, interest rates, and insurance administration costs. The probability of an
individual's death at a certain age can be found in the Mortality Table. The
Mortality Table is created by a country using a certain method. In this study, the
Mortality Table will be approximated using the Makeham distribution and the Lee-
Carter method. The purpose of this research is to calculate net term life insurance
premiums assuming constant interest rates. In addition, the calculation will use the
equivalence principle, namely the expected present value of the ????[????] premium
equal to the expected present value of the liability payment from ????[?]. company.
Two data were used, namely (1) 2014 Italian IPS55 mortality table data published
by the Society of Actuaries (SOA) and (2) 1950-2017 Italian mortality projection
table data published by the Human Mortality Database (HMD). The results of the
study show that in general, the chance of dying for men in Italy is higher than the
chance of dying for women so gender affects the calculation of the premium. In
addition, the premium for men in Italy with the Makeham distribution is smaller
than the premium for the Lee-Carter method, with an average premium difference
of around 29%. The same is true for women in Italy, the size of the premium with
the Makeham distribution is smaller than the size of the premium with the Lee-
Carter method, with an average premium difference of around 2.6%. |
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