V_Payment_Protection {DetLifeInsurance}

Reserve valuation for Payment Protection

Description

Calculates the reserve for the loan insurance up to the moment t.

Usage

V_Payment_Protection(
  px,
  x,
  n,
  k = 1,
  cantprem = 1,
  premperyear = 1,
  i = 0.04,
  ip = 0.04,
  data,
  prop = 1,
  type = "outstanding_debt",
  method = "interest_only",
  V0,
  t
)

Arguments

px

A numeric value. The value of the premium paid in each period.

x

An integer. The age of the insuree.

n

An integer. Loan term (in years).

k

An integer. Number of payments per year.

cantprem

An integer. The total number of premiums.

premperyear

An integer. The number of premiums to be paid per year.

i

The interest rate. A numeric type value.

ip

The interest rate of the loan. 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).

type

A character string. The type of loan protection/reimburstment ("outstanding_debt" or "payments").

method

A character string. Amortization scheme ("constant_instalment", "interest_only" or "constant_principal").

V0

A numeric type value. Loan value.

t

An integer. The moment of valuation (in months if it is a fractional coverage or in years if it is not).

Value

Returns the actuarial present value of the loan protection.

Examples

px1<-31.6216618772779
c1<-10500
V_Payment_Protection(px1,30,25,1,10,1,0.06,0.07,CSO80FANB,1,"payments","constant_instalment",c1,25)