PremiumFrac {DetLifeInsurance}

Fractional Premium

Description

Calculates the annualized value of the fractional premiums.

Usage

PremiumFrac(px1, x, m, k, i = 0.04, data, prop = 1, effect = "yes", assumption)

Arguments

px1

A numeric type value. The value of the single net premium.

x

An integer. The age of the insuree.

m

An integer. Years of premium payment.

k

An integer. Number of premiums per year.

i

The interest rate. A numeric type value.

data

A data.frame of the mortality table, with the first column being the age and the second one the probability of death.

prop

A numeric value. It represents the proportion of the mortality table used (between 0 and 1).

effect

A character string. This parameter indicates if, in the event of death, the insuree is released from paying the remaining fractional premiums of that year ("yes" or "no")

assumption

A character string. The assumption used for fractional ages ("UDD" for uniform distribution of deaths and "constant" for constant force of mortality).

Value

Returns the annualized value of the fractional premium.

Note

If k=1, regardless of the "effect", the returned value is the annual premium.

References

Chapter 4 of Actuarial Mathematics for Life Contingent Risks (2009) by Dickson, Hardy and Waters

Examples

PremiumFrac(1000,20,10,2,0.04,CSO80MANB,1,"yes","constant")
PremiumFrac(1000,20,10,2,0.04,CSO80MANB,1,"no","UDD")