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  3. a whole-life insurance on (85) pays a benefit of 1

A whole-life insurance on (85) pays a benefit of 1000 at the end of the...

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Finance

A whole-life insurance on (85) pays a benefit of 1000 at the end of the year of death.

Mortality follows the Illustrative Life Table, from which the following extract is provided:

l85 = 61,184.9

l90 = 41,841.1

l91 = 37,618.6

l92 = 33,379.9

l93 = 29,183.8

l94 = 25,094.3

l95 = 21,178.3

l96 = 17,501.8

l97 = 14,125.9

The annual effective interest rate is 5%.

Z is defined to be the present value random variable for this insurance.

Calculate Pr(Z < 600).

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