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Endowment insurance with a sum insured of $350,000 payable at the end of the year of death or on survival to term, sold to a select life aged [x]. Term: 12 years Mortality AM92 Interest rate 6% p.a. Premium term: 12 years, same as the benefit period Premiums paid annually in advance Expenses: o Policy establishment expenses: $1200 o Premium expenses: 2.5% of the premium charged o Death/endowment claim expenses at the time of payment: $750 You may assume there are no lapses or surrenders Policy value basis: Net of expenses and AM92 ultimate at 4% p.a. 9. Calculate the annual gross premium (inclusive of expenses) for this product to the nearest cent (this will require notation that is difficult to reproduce in a word processor, so please include your response and working in the handwritten responses of Section 1 and include your numerical response in your report). 10. Assume that the policy has actually been sold for a premium level that is 7% higher than this gross premium amount you have calculated in question 9. State the value of this loaded premium to the nearest cent. Use this loaded premium as a basis for the remaining questions. 11. Create a table outlining the potential amounts payable and policy value in each year of the policy. Your table should include columns for year, age, premium, premium expenses, claim expenses, benefits, and policy value. Policy values should be calculated net of expenses and using AM92 ultimate at 4% p.a. In your report, make sure that your assumptions are clearly outlined. 12. Create a table outlining the expected amounts payable each year. Your table should include columns for year, premium, expenses, death/maturity benefits, interest, and the expected net cash flow. 13. Create additional columns and a chart showing the profit signature over the life of the policy 14. Calculate the following profit metrics for the policy: NPV at 6% NPV at 12% IRR Profit margin Endowment insurance with a sum insured of $350,000 payable at the end of the year of death or on survival to term, sold to a select life aged [x]. Term: 12 years Mortality AM92 Interest rate 6% p.a. Premium term: 12 years, same as the benefit period Premiums paid annually in advance Expenses: o Policy establishment expenses: $1200 o Premium expenses: 2.5% of the premium charged o Death/endowment claim expenses at the time of payment: $750 You may assume there are no lapses or surrenders Policy value basis: Net of expenses and AM92 ultimate at 4% p.a. 9. Calculate the annual gross premium (inclusive of expenses) for this product to the nearest cent (this will require notation that is difficult to reproduce in a word processor, so please include your response and working in the handwritten responses of Section 1 and include your numerical response in your report). 10. Assume that the policy has actually been sold for a premium level that is 7% higher than this gross premium amount you have calculated in question 9. State the value of this loaded premium to the nearest cent. Use this loaded premium as a basis for the remaining questions. 11. Create a table outlining the potential amounts payable and policy value in each year of the policy. Your table should include columns for year, age, premium, premium expenses, claim expenses, benefits, and policy value. Policy values should be calculated net of expenses and using AM92 ultimate at 4% p.a. In your report, make sure that your assumptions are clearly outlined. 12. Create a table outlining the expected amounts payable each year. Your table should include columns for year, premium, expenses, death/maturity benefits, interest, and the expected net cash flow. 13. Create additional columns and a chart showing the profit signature over the life of the policy 14. Calculate the following profit metrics for the policy: NPV at 6% NPV at 12% IRR Profit margin

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