Calculating Funding Premiums for Universal Life Insurance

Calvin Cherry

North American Actuarial Journal, 2000, vol. 4, issue 2, 20-27

Abstract: This paper provides a brief overview of the most commonly used methods for calculating the level gross premium required to achieve a specific funding target under a typical universal life product design. The first method described utilizes summation techniques from numerical analysis to derive a general accumulation formula. Manipulating this formula leads to an expression for the modal gross funding premium. The second method uses a partial Taylor series expansion to derive a variant of the Newton-Raphson iteration formula, which can be shown to provide second-order convergence to the funding premium. Other iteration methods providing first-order convergence are also described. A more detailed discussion of these methods and their applicability can be found in the author’s paper “Calculating Funding Premiums for Universal Life Insurance, with Examples,” scheduled to be published in the 1999–2000 volume of the TSA Reports.

Date: 2000
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/10920277.2000.10595893 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:uaajxx:v:4:y:2000:i:2:p:20-27

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/uaaj20

DOI: 10.1080/10920277.2000.10595893

Access Statistics for this article

North American Actuarial Journal is currently edited by Kathryn Baker

More articles in North American Actuarial Journal from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().