ESTIMATION NET PREMIUM OF TERM LIFE INSURANCE FROM TABLE ???????? LEE-CARTER (CASE STUDY OF ITALY LIFE TABLES 1950- 2017)

• Main Author: Halimah, Ulya
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/73032
• Institution: Institut Teknologi Bandung

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%.