Valuation of Participating Life Insurance Liabilities |
| |
Authors: | P Linnemann |
| |
Institution: | Trygg-Hansa , Fack , S-10240 Stockholm 5, Sweden |
| |
Abstract: | Surrender and paid-up states are incorporated in the valuation of guaranteed benefits and payments of a level premium paying life insurance policy. We present different valuation methods and examine to what extent they avoid capitalizing and releasing future loadings which are associated with the payment of future premiums. We demonstrate how to avoid capital being required in the future to cover valuation strains. The paid-up benefit valuation method is being extended so that it does not require the premium basis to be on the safe-side of the valuation basis. We obtain a unification and integration of the level premium and paid-up valuation principles. |
| |
Keywords: | Actuarial modeling capitalization of future loadings extension of paid-up method guaranteed benefits life insurance reserving valuation principles valuation strains zerorisation |
|