Net and Gross Reserve of Life Insurance

term life insurance

pure endowment

endowment

age

premium term

term

technical interest rate

initial costs

administrative costs

age of entry 35 years

premium paid in 15 years

term 35 years

technical interest rate 2.4

initial costs α	3.5	% of benefit
administrative costs β	3	‰ of benefit

net reserve

gross reserve

This Demonstration shows the net and gross premium reserves of life insurance. The reserves are calculated for the three basic types of life insurance: term insurance, pure endowment, and endowment with unitary benefit. For all cases, the premium can be paid as an

n

-year temporary annuity. You can vary the technical interest rate in the range from 1 to 10% per annum. The decremental data used for the calculations is 2001–2005 Czech Republic data.