MTHEL131 Chapter Notes - Chapter 5: Whole Life Insurance, Life Insurance, Term Life Insurance
13 Jun 2014
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Lot of different kinds of whole life death benefit is paid upon policy holder"s death if policyholder does not lapse policy. Most ic use terminal age in pricing (commonly 100) If policyholder survives to age 100, face is paid to policyholder like endowment insurance since csv = face. If policyholder doesn"t live to 100, whole life is also identical to term to 100 (ie death benefit at time of death prior to age 100) Actuarially whole life insurance must build up policy values since payment is certain at defined policy terminal age (100) ==> Not obligated in canada (can sell term to 100 with zero csvs - cheaper than whole life) Policy normally has table of csvs for policy. Can terminate policy to get vsc but can borrow using csvs as collateral (policy loan) at interest. If you die with policy loan, l, your death benefit is f - l.
