FAM L Question

Fundamentals of Actuarial Mathematics –
Long-Term
Sample Questions
December 16th, 2022
This note contains sample questions for the Fundamentals of Actuarial Mathematics –
Long-Term (FAM-L) exam The questions are sorted by the Society of Actuaries’
recommended resources for this exam All question numbers follow the format of X.Y,
where X identifies the source and Y is the question number from that source. X refers to
the chapter of Actuarial Mathematics for Life Contingent Risks, 3rd Edition (AMLCR).
Many of these questions are based on questions that have previously appeared on MLC
exams from 2012 through 2017. These are identified by a parenthetical expression at the
end of such questions. Questions that have been modified have been modified to:
• Replace the Illustrative Life Table (ILT) which was used on the MLC exam with
the Standard Ultimate Life Table (SULT), which will be used with the FAM-L
exam
• Change language to reflect the current terms used on the FAM-L exam. For
example, consistent with AMCLR, we now use “policy value” instead of “reserve”
in many cases where prior exams would have used “reserve.”
Multiple-choice questions from MLC exams in 2012 and 2013, which are included in
these sample questions, were intended to average six minutes each. The multiple-choice
questions for the MLC exam in 2014 and later were intended to average five minutes
each. The multiple-choice questions on the FAM-L exam are intended to average five
minutes each, therefore, the questions based on the 2012 and 2013 MLC exams may be
slightly longer than those on the FAM-L exam. That being said, these questions are
representative of the types of questions that might be asked of candidates sitting for the
FAM-L exam. These questions are intended to represent the depth of understanding
required of candidates. The distribution of questions by topic is not intended to represent
the distribution of questions on the FAM-L exam
There are also some additional sample questions that are not directly based on prior exam
questions from 2012 through 2017.
Versions:
December 16, 2022 Added select questions from the Fall 2022 FAM-L exam and updated
term “modified reserve” to “modified net premium reserve”
August 8, 2022 Updated term “expense reserve” to “expense policy value” and corrected
answer choices for question 18.4
July 29, 2022 Original version for FAM-L
Copyright © Society of Actuaries
December 16, 2022 Page 1

1.1 Determine which of the following statements is NOT true with regard to underwriting.
(A) Life insurance policies are typically underwritten to prevent adverse selection.
(B) The distribution method affects the level of underwriting.
(C) Single premium immediate annuities are typically underwritten to prevent adverse
selection.
(D) Underwriting may result in an insured life being classified as a rated life due to
the insured’s occupation or hobby.
(E) A pure endowment does not need to be underwritten to prevent adverse selection.
1.2. Over the last 30 years, life insurance products and the management of the associated risks
have radically changed and become more complex.
Determine which of the following is NOT a reason for this change.
(A) More sophisticated policyholders.

(B) More competition among life insurance companies.
(C) More computational power.
(D) More complex risk management techniques.
(E) Separation of the savings elements and the protection elements of life insurance
products.
1.3. A company offers a modern insurance contract that has the following features:
i) A benefit linked to the performance of an investment fund
ii) A guaranteed minimum return on the premiums paid
iii) A guaranteed minimum death benefit payable if the insured dies before the
contract matures
iv) A contract term of 7 years
Determine the type of contract offered.

(A) Term life insurance
(B) Universal life insurance
(C) Variable annuity
(D) Endowment insurance
(E) Reversionary annuity [Question on October 2022 FAM-L Exam]

1.4. A self-employed small business owner purchased an insurance contract that will pay a
benefit equal to 70% of salary in the event that the owner becomes sick and cannot work.
The contract will cease at retirement age.
Determine which of the following contracts provides these benefits.

(A) Term life insurance
(B) Disability income insurance
(C) Long-term care insurance
(D) Single premium immediate annuity
(E) Critical illness insurance
[Question on October 2022 FAM-L Exam]

2.1. You are given:
1
 t 4
(i) ) 1 −  , for 0 ≤ t ≤ ω
S 0 (t=
 ω
1
(ii) µ 65 =
180
Calculate e106 , the curtate expectation of life at age 106.
(A) 2.2
(B) 2.5
(C) 2.7
(D) 3.0
(E) 3.2
[Question 3 on the Fall 2012 exam]

2.2 Scientists are searching for a vaccine for a disease. You are given:
(i) 100,000 lives age x are exposed to the disease
(ii) Future lifetimes are independent, except that the vaccine, if available, will be
given to all at the end of year 1
(iii) The probability that the vaccine will be available is 0.2
(iv) For each life during year 1, q x = 0.02
(v) For each life during year 2, q x +1 = 0.01 if the vaccine has been given, and
q x +1 = 0.02 if it has not been given
Calculate the standard deviation of the number of survivors at the end of year 2.
(A) 100
(B) 200
(C) 300
(D) 400
(E) 500
[Question 20 on the Spring 2013 exam]

2.3. You are given that mortality follows Gompertz Law with B = 0.00027 and c = 1.1.
Calculate f50 (10) .
(A) 0.048
(B) 0.050
(C) 0.052
(D) 0.054
(E) 0.056
t2
2.4. You are given t q0 = for 0 < t < 100.
10, 000
Calculate e 75:10 .
(A) 6.6
(B) 7.0
(C) 7.4
(D) 7.8
(E) 8.2

2.5. You are given the following:
e40:20 = 18
(i)
(ii) e60 = 25
(iii) q = 0.2
20 40
(iv) q40 = 0.003
Calculate e41 .
(A) 36.1
(B) 37.1
(C) 38.1
(D) 39.1
(E) 40.1
2.6. You are given the survival function:

1
 x 3
S0 ( x ) =  1 −  , 0 ≤ x ≤ 60.
 60 
Calculate 1000µ 35 .
(A) 5.6
(B) 6.7
(C) 13.3
(D) 16.7
(E) 20.1

2.7. You are given the following survival function of a newborn:
 x
1 − 250 , 0 ≤ x < 40

S0 ( x ) =  2
1 −  x  , 40 ≤ x ≤ 100
  
  100 
Calculate the probability that (30) dies within the next 20 years.
(A) 0.13
(B) 0.15
(C) 0.17
(D) 0.19
(E) 0.21
2.8. In a population initially consisting of 75% females and 25% males, you are given:
(i) For a female, the force of mortality is constant and equals µ

(ii) For a male, the force of mortality is constant and equals 1.5µ
(iii) At the end of 20 years, the population is expected to consist of 85% females and
15% males
Calculate the probability that a female survives one year.
(A) 0.89
(B) 0.92
(C) 0.94
(D) 0.96
(E) 0.99

2.9. You are given that mortality follows Makeham’s Law with the following parameters:
i) A = 0.004
ii) B = 0.00003
iii) c = 1.1
Let L15 be the random variable representing the number of lives alive at the end of 15
years if there are 10,000 lives age 50 at time 0.
Calculate Var[ L15 ] .
(A) 1,317
(B) 1,328
(C) 1,339
(D) 1,350
(E) 1,361
2.10. You are given:
µx +t β t2 , t ≥ 0
i) =
ii) lx = 1000
iii) lx +10 = 400
Calculate 1000 β .
(A) 2.75
(B) 2.80
(C) 2.85
(D) 2.90
(E) 2.95

i) q80 = 0.04
ii) q81 = 0.06
iii) q82 = 0.08
iv) Deaths between ages 80 and 81 are uniformly distributed
v) Deaths between ages 81 and 82 are subject to a constant force of mortality
Calculate the probability that a person aged 80.6 will die between ages 81.1 and 81.6.
(A) 0.0294
(B) 0.0296
(C) 0.0298
(D) 0.0300
(E) 0.0302
2.12. For a new light bulb, you are given:
t2 + t
i) t q0 = for 0 ≤ t ≤ 8
72
ii) T0 is the random variable representing the future lifetime
Calculate Var[T0 ] .
(A) 3.9
(B) 4.1
(C) 4.3
(D) 4.5
(E) 4.7

3.1. You are given:
(i) An excerpt from a select and ultimate life table with a select period of 3 years:
x l[ x] l [ x ] +1 l [ x ]+ 2 l x +3 x+3
60 80,000 79,000 77,000 74,000 63
61 78,000 76,000 73,000 70,000 64
62 75,000 72,000 69,000 67,000 65
63 71,000 68,000 66,000 65,000 66
(ii) Deaths follow a constant force of mortality over each year of age
Calculate 1000 23
q [60] + 0.75 .
(A) 104
(B) 117
(C) 122
(D) 135
(E) 142

3.2. You are given:
(i) The following extract from a mortality table with a one-year select period:
x l[ x] d [ x] l x +1 x +1
65 1000 40 − 66
66 955 45 − 67
(ii) Deaths are uniformly distributed over each year of age


e [ 65] = 15.0

Calculate e[66] .
(A) 14.1
(B) 14.3
(C) 14.5
(D) 14.7
(E) 14.9

3.3. You are given:
(i) An excerpt from a select and ultimate life table with a select period of 2 years:
x l [ x] l [ x]+1 l x+2 x+2

50 99,000 96,000 93,000 52
51 97,000 93,000 89,000 53
52 93,000 88,000 83,000 54
53 90,000 84,000 78,000 55

Calculate 10,000 2.2 q [51] + 0.5 .
(A) 705
(B) 709
(C) 713
(D) 1070
(E) 1074
3.4. The SULT Club has 4000 members all age 25 with independent future lifetimes. The
mortality for each member follows the Standard Ultimate Life Table.
Calculate the largest integer N, using the normal approximation, such that the probability
that there are at least N survivors at age 95 is at least 90%.
(A) 800
(B) 815
(C) 830
(D) 845
(E) 860
[A modified version of Question 24 on the Fall 2013 exam]

3.5. You are given:
x lx
60 99,999
61 88,888
62 77,777
63 66,666
64 55,555
65 44,444
66 33,333
67 22,222
a= 3.4 2.5
q 60 assuming a uniform distribution of deaths over each year of age
b= 3.4 2.5
q 60 assuming a constant force of mortality over each year of age
Calculate 100,000(a − b).
(A) –24
(B) 9
(C) 42
(D) 73
(E) 106

3.6. You are given the following extract from a table with a 3-year select period:
x q[ x ] q[ x ]+1 q[ x ]+2 q x +3 x+3

60 0.09 0.11 0.13 0.15 63
61 0.10 0.12 0.14 0.16 64
62 0.11 0.13 0.15 0.17 65
63 0.12 0.14 0.16 0.18 66
64 0.13 0.15 0.17 0.19 67
e 64 = 5.10
Calculate e[61].
(A) 5.30
(B) 5.39
(C) 5.68
(D) 5.85
(E) 6.00

3.7. For a mortality table with a select period of two years, you are given:
x q[ x] q[ x]+1 qx+2 x+2

50 0.0050 0.0063 0.0080 52
51 0.0060 0.0073 0.0090 53
52 0.0070 0.0083 0.0100 54
53 0.0080 0.0093 0.0110 55
The force of mortality is constant between integral ages.

Calculate 1000 2.5 q[50]+0.4 .
(A) 15.2
(B) 16.4
(C) 17.7
(D) 19.0
(E) 20.2

3.8. A club is established with 2000 members, 1000 of exact age 35 and 1000 of exact age 45.
You are given:
(i) Mortality follows the Standard Ultimate Life Table
(ii) Future lifetimes are independent
(iii) N is the random variable for the number of members still alive 40 years after the
club is established
Using the normal approximation, without the continuity correction, calculate the smallest
n such that Pr( N ≥ n) ≤ 0.05.
(A) 1500
(B) 1505
(C) 1510
(D) 1515
(E) 1520
[A modified version of Question 1 on the Spring 2015 exam]
3.9. A father-son club has 4000 members, 2000 of which are age 20 and the other 2000 are
age 45. In 25 years, the members of the club intend to hold a reunion.
You are given:
(i) All lives have independent future lifetimes.
(ii) Mortality follows the Standard Ultimate Life Table.
Using the normal approximation, without the continuity correction, calculate the 99th
percentile of the number of surviving members at the time of the reunion.
(A) 3810
(B) 3820
(C) 3830
(D) 3840
(E) 3850

3.10. A group of 100 people start a Scissor Usage Support Group. The rate at which members
enter and leave the group is dependent on whether they are right-handed or left-handed.
You are given the following:
(i) The initial membership is made up of 75% left-handed members (L) and 25%
right-handed members (R)
(ii) After the group initially forms, 35 new (L) and 15 new (R) join the group at the
start of each subsequent year
(iii) Members leave the group only at the end of each year
(iv) q L = 0.25 for all years
(v) q R = 0.50 for all years
Calculate the proportion of the Scissor Usage Support Group’s expected membership that
is left-handed at the start of the group’s 6th year, before any new members join for that
year.
(A) 0.76
(B) 0.81
(C) 0.86
(D) 0.91
(E) 0.96

3.11. For the country of Bienna, you are given:
(i) Bienna publishes mortality rates in biennial form, that is, mortality rates are of the
form:
2 q2 x , for x = 0,1, 2,...
(ii) Deaths are assumed to be uniformly distributed between ages 2x and 2x + 2, for
x = 0,1, 2,...
(iii) q = 0.02
2 50
(iv) q = 0.04
2 52
Calculate the probability that (50) dies during the next 2.5 years.
(A) 0.02
(B) 0.03
(C) 0.04
(D) 0.05
(E) 0.06

3.12. X and Y are both age 61. X has just purchased a whole life insurance policy. Y purchased
a whole life insurance policy one year ago.
Both X and Y are subject to the following 3-year select and ultimate table:
x [ x ]  [ x ]+1  [ x ]+ 2  x+3 x+3

60 10,000 9,600 8,640 7,771 63
61 8,654 8,135 6,996 5,737 64
62 7,119 6,549 5,501 4,016 65
63 5,760 4,954 3,765 2,410 66
The force of mortality is constant over each year of age.

Calculate the difference in the probability of survival to age 64.5 between X and Y.
(A) 0.035
(B) 0.045
(C) 0.055
(D) 0.065
(E) 0.075

3.13. A life is subject to the following 3-year select and ultimate table:
[x]  [ x]  [ x]+1  [ x ]+ 2  x+3 x+3

55 10,000 9,493 8,533 7,664 58
56 8,547 8,028 6,889 5,630 59
57 7,011 6,443 5,395 3,904 60
58 5,853 4,846 3,548 2,210 61
You are also given:

(i) e60 = 1
Calculate e[58]+ 2 .
(A) 1.5
(B) 1.6
(C) 1.7
(D) 1.8
(E) 1.9

3.14. You are given the following information from a life table:
x lx dx px qx
95 − − − 0.40
96 − − 0.20 −
97 − 72 − 1.00
You are also given:

(i) l 90 = 1000 and l 93 = 825
(ii) Deaths are uniformly distributed over each year of age.

Calculate the probability that (90) dies between ages 93 and 95.5.
(A) 0.195
(B) 0.220
(C) 0.345
(D) 0.465
(E) 0.668
3.15. You are given the following survival function:

x 0.5
S0 ( x) = (1 − ) , 0 ≤ x ≤ 100
100
Calculate 1000 µ25 .
(A) 6.7
(B) 10.0
(C) 13.3
(D) 16.7
(E) 20.0

i) The following extract from a three-year select and ultimate table:
[ x] q[ x ] q[ x ]+1 q[ x ]+ 2 qx +3 x+3
50 0.020 0.031 0.043 0.056 53
51 0.025 0.037 0.050 0.065 54
52 0.030 0.043 0.057 0.072 55
53 0.035 0.049 0.065 0.091 56
54 0.040 0.055 0.076 0.113 57
55 0.045 0.061 0.090 0.140 58
ii) Mortality follows a uniform distribution of deaths over each year of age
Calculate 1000(0.6 | 1.5 q[52]+1.7 ) .

(A) 91
(B) 92
(C) 93
(D) 94
(E) 95
3.17. For a given population with two subgroups, you are given:
i) Subgroup X represents 80% of the total population and is subject to a

constant annual force of mortality of 0.01
ii) Subgroup Y represents 20% of the total population and is subject to a
constant annual force of mortality of 0.02
Calculate the proportion of the population 15 years from now that is part of subgroup X.
(A) 80.0%
(B) 81.1%
(C) 82.3%
(D) 83.4%
(E) 84.6%

4.1. For a special whole life insurance policy issued on (40), you are given:
(i) Death benefits are payable at the end of the year of death
(ii) The amount of benefit is 2 if death occurs within the first 20 years and is 1
thereafter
(iii) Z is the present value random variable for the payments under this insurance
(iv) i = 0.03
(v)
x Ax 20 Ex
40 0.36987 0.51276
60 0.62567 0.17878
(vi) E[ Z 2 ] = 0.24954
Calculate the standard deviation of Z.
(A) 0.27
(B) 0.32
(C) 0.37
(D) 0.42
(E) 0.47

4.2. For a special 2-year term insurance policy on (x), you are given:
(i) Death benefits are payable at the end of the half-year of death
(ii) The amount of the death benefit is 300,000 for the first half-year and increases by
30,000 per half-year thereafter
(iii) q x = 0.16 and q x +1 = 0.23
(iv) i (2) = 0.18

(v) Deaths are assumed to follow a constant force of mortality between integral ages
(vi) Z is the present value random variable for this insurance
Calculate Pr( Z > 277, 000) .
(A) 0.08
(B) 0.11
(C) 0.14
(D) 0.18
(E) 0.21
4.3. You are given:

(i) q 60 = 0.01
(ii) Using i = 0.05 , A60:3 = 0.86545
Using i = 0.045 calculate A60:3 .
(A) 0.866
(B) 0.870
(C) 0.874
(D) 0.878
(E) 0.882

4.4 For a special increasing whole life insurance on (40), payable at the moment of death,
you are given:
(i) 1 + 0.2t , t ≥ 0
The death benefit at time t is bt =
(ii) (1 + 0.2t ) −2 , t ≥ 0
The interest discount factor at time t is v(t ) =
0.025, 0 ≤ t < 40
(iii) t p40 µ40+t = 
0, otherwise
(iv) Z is the present value random variable for this insurance
Calculate Var(Z).
(A) 0.036
(B) 0.038
(C) 0.040
(D) 0.042
(E) 0.044
4.5. For a 30-year term life insurance of 100,000 on (45), you are given:
(i) The death benefit is payable at the moment of death
(ii) Mortality follows the Standard Ultimate Life Table
(iii) δ = 0.05
(iv) Deaths are uniformly distributed over each year of age
Calculate the 95th percentile of the present value of benefits random variable for this
insurance.
(A) 30,200
(B) 31,200
(C) 35,200
(D) 36,200
(E) 37,200

4.6. For a 3-year term insurance of 1000 on (70), you are given:
(i) SULT
q 70 + k is the mortality rate from the Standard Ultimate Life Table, for k = 0,1, 2
(ii) q 70+ k is the mortality rate used to price this insurance, for k = 0,1, 2
(iii)
= q 70+ k (0.95)
= k
q 70 +k ,
SULT
for k 0,1, 2
(iv) i = 0.05
Calculate the single net premium.
(A) 29.05
(B) 29.85
(C) 30.65
(D) 31.45
(E) 32.25
4.7. For a 25-year pure endowment of 1 on (x), you are given:

(i) Z is the present value random variable at issue of the benefit payment
(ii) Var ( Z ) = 0.10 E [ Z ]
(iii) 25 px = 0.57
Calculate the annual effective interest rate.
(A) 5.8%
(B) 6.0%
(C) 6.2%
(D) 6.4%
(E) 6.6%

4.8. For a whole life insurance of 1000 on (50), you are given:
(i) The death benefit is payable at the end of the year of death
(iii) i = 0.04 in the first year, and i = 0.05 in subsequent years
Calculate the actuarial present value of this insurance.
(A) 187
(B) 189
(C) 191
(D) 193
(E) 195
4.9. You are given:

(i) A35:15 = 0.39
(ii) A35:15
1 0.25
(iii) A35 = 0.32
Calculate A50 .
(A) 0.35
(B) 0.40
(C) 0.45
(D) 0.50
(E) 0.55
[Question 4 on the Fall 2014 exam

4.10. The present value random variable for an insurance policy on (x) is expressed as:
0, if Tx ≤ 10
 Tx
v , if 10 < Tx ≤ 20
Z = T
 2v , if 20 < Tx ≤ 30
x
 0, thereafter

Determine which of the following is a correct expression for E [ Z ] .
(A) 10
Ax + 20
Ax − 30 Ax
(B) Ax + 20 Ex Ax + 20 − 2 30 Ex Ax +30
(C) 10 Ex A x + 20 Ex A x + 20 − 2 30 Ex A x +30
(D) 10 Ex A x +10 + 20 Ex A x + 20 − 2 30 Ex A x +30
(E) 10 Ex  A x +10 + 10 Ex +10 A x + 20 − 10 Ex + 20 A x +30 

(i) Z1 is the present value random variable for an n-year term insurance of 1000
issued to (x)
(ii) Z 2 is the present value random variable for an n-year endowment insurance of
1000 issued to (x)
(iii) For both Z 1 and Z 2 the death benefit is payable at the end of the year of death
(iv) E [ Z1 ] = 528
(v) Var ( Z 2 ) = 15, 000
(vi) A x:1n = 0.209
(vii) 2
A x:n1 = 0.136
Calculate Var ( Z1 ) .
(A) 143,400
(B) 177,500
(C) 211,200
(D) 245,300
(E) 279,300

4.12. For three fully discrete insurance products on the same (x), you are given:
(i) Z 1 is the present value random variable for a 20-year term insurance of 50
(ii) Z 2 is the present value random variable for a 20-year deferred whole life
insurance of 100
(iii) Z 3 is the present value random variable for a whole life insurance of 100.
(iv) E  Z 1  = 1.65 and E  Z 2  = 10.75
(v) Var ( Z 1 ) = 46.75 and Var ( Z 2 ) = 50.78
Calculate Var ( Z 3 ) .
(A) 62
(B) 109
(C) 167
(D) 202
(E) 238

4.13. For a 2-year deferred, 2-year term insurance of 2000 on [65], you are given:
(i) The following select and ultimate mortality table with a 3-year select period:
x q [ x] q [ x]+1 q [ x ]+ 2 q x +3 x+3
65 0.08 0.10 0.12 0.14 68

66 0.09 0.11 0.13 0.15 69
67 0.10 0.12 0.14 0.16 70
68 0.11 0.13 0.15 0.17 71
69 0.12 0.14 0.16 0.18 72
(ii) i = 0.04
(iii) The death benefit is payable at the end of the year of death
Calculate the actuarial present value of this insurance.
(A) 260
(B) 290
(C) 350
(D) 370
(E) 410

4.14. A fund is established for the benefit of 400 workers all age 60 with independent future
lifetimes. When they reach age 85, the fund will be dissolved and distributed to the
survivors.
The fund will earn interest at a rate of 5% per year.
The initial fund balance, F, is determined so that the probability that the fund will pay at
least 5000 to each survivor is 86%, using the normal approximation.
Mortality follows the Standard Ultimate Life Table.
Calculate F.
(A) 350,000
(B) 360,000
(C) 370,000
(D) 380,000
(E) 390,000
4.15. For a special whole life insurance on (x), you are given:
(i) Death benefits are payable at the moment of death
(ii) The death benefit at time
= t is bt e 0.02t , for t ≥ 0
(iii) =µ x +t 0.04, for t ≥ 0

(iv) δ = 0.06
(v) Z is the present value at issue random variable for this insurance
Calculate Var ( Z ).
(A) 0.020
(B) 0.036
(C) 0.052
(D) 0.068
(E) 0.083

4.16. You are given the following extract of ultimate mortality rates from a two-year select and
ultimate mortality table:
x qx
50 0.045
51 0.050
52 0.055
53 0.060
The select mortality rates satisfy the following:

• q[ x] = 0.7 qx
• q[ x]+1 = 0.8qx +1
You are also given that i = 0.04 .

Calculate A[501 ] : 3 .
(A) 0.08
(B) 0.09
(C) 0.10
(D) 0.11
(E) 0.12

4.17. For a special whole life policy on (48), you are given:
(i) The policy pays 5000 if the insured’s death is before the median curtate future
lifetime at issue and 10,000 if death is after the median curtate future lifetime at
issue
(iii) Death benefits are paid at the end of the year of death
(iv) i = 0.05
Calculate the actuarial present value of benefits for this policy.
(A) 1130
(B) 1160
(C) 1190
(D) 1220
(E) 1250

4.18. You are given that T, the time to first failure of an industrial robot, has a density f(t) given
by
0.1, 0≤t<2
f (t ) =  −2
0.4t , 2 ≤ t < 10
with f ( t ) undetermined on [10, ∞).
Consider a supplemental warranty on this robot that pays 100,000 at the time T of its first
failure if 2 ≤ T ≤ 10 , with no benefits payable otherwise.
You are also given that δ = 5% .
Calculate the 90th percentile of the present value of the future benefits under this
warranty.
(A) 82,000
(B) 84,000
(C) 87,000
(D) 91,000
(E) 95,000

4.19. (80) purchases a whole life insurance policy of 100,000.
You are given:
(i) The policy is priced with a select period of one year
(ii) The select mortality rate equals 80% of the mortality rate from the Standard
Ultimate Life Table
(iii) Ultimate mortality follows the Standard Ultimate Life Table
(iv) i = 0.05
Calculate the actuarial present value of the death benefits for this insurance
(A) 58,950
(B) 59,050
(C) 59,150
(D) 59,250
(E) 59,350
4.20. For a special fully continuous whole life insurance on (x), you are given:
i) µ x +t 0.03, t ≥ 0
=
ii) δ = 0.06
iii) t is bt e0.05t , t ≥ 0
The death benefit at time =
iv) Z is the present value random variable at issue for this insurance
Calculate Var(Z).
A. 0.0300
B. 0.0325
C. 0.0350
D. 0.0375
E. 0.0400

4.21. For a two-year term insurance of 1 on (x) payable at the moment of death, you are given:
i) qx = 0.04
ii) qx +1 = 0.06
iii) Deaths are uniformly distributed over each year of age
iv) i = 0.04
v) Z is the present value random variable for this insurance
Calculate Var[Z].
(A) 0.065
(B) 0.069
(C) 0.073
(D) 0.077
(E) 0.081
4.22. (50) just had surgery to remove a life-threatening tumor and is purchasing a 3-year term
life insurance policy with a face amount of 100,000. You are given:
i) The probability of (50) surviving the first year after surgery is 55% of the
Standard Ultimate Life Table survival probability
ii) If (50) survives the first year, subsequent mortality follows the Standard
Ultimate
Life Table
iii) Benefits are payable at the end of the year of death
iv) i = 0.05
Calculate the expected present value of the death benefit.

(A) 43,000
(B) 44,000
(C) 45,000
(D) 46,000
(E) 47,000

5.1. You are given:
(i) =δ t 0.06, t ≥ 0
(ii) µ x (t ) 0.01, t ≥ 0
=
(iii) Y is the present value random variable for a continuous annuity of 1 per year,
payable for the lifetime of (x) with 10 years certain
Calculate Pr(Y > E[Y ]).
(A) 0.705
(B) 0.710
(C) 0.715
(D) 0.720
(E) 0.725
5.2. You are given:

(i) A x = 0.30
(ii) A x + n = 0.40
(iii) A x:n1 = 0.35
(iv) i = 0.05
Calculate a x:n .
(A) 9.3
(B) 9.6
(C) 9.8
(D) 10.0
(E) 10.3

5.3. You are given:
(iii) i = 0.05
d
Calculate ( Ia ) 40 : t at t = 10.5.
dt
(A) 5.8
(B) 6.0
(C) 6.2
(D) 6.4
(E) 6.6

5.4. (40) wins the SOA lottery and will receive both:
• A deferred life annuity of K per year, payable continuously, starting at age

40 + e 40 and

• An annuity certain of K per year, payable continuously, for e 40 years
You are given:

(i) µ = 0.02
(ii) δ = 0.01
(iii) The actuarial present value of the payments is 10,000
Calculate K.
(A) 214
(B) 216
(C) 218
(D) 220
(E) 222

5.5. For an annuity-due that pays 100 at the beginning of each year that (45) is alive, you are
given:
(i) Mortality for standard lives follows the Standard Ultimate Life Table
(ii) The force of mortality for standard lives age 45 + t is represented as µ45
SULT
+t
(iii) The force of mortality for substandard lives age 45 + t , µ45S +t , is defined as:
 µ45SULT
+ t + 0.05, for 0 ≤ t < 1
µ S
45 + t =  SULT
 µ45+t , for t ≥ 1
(iv) i = 0.05
Calculate the actuarial present value of this annuity for a substandard life age 45.
(A) 1700
(B) 1710
(C) 1720
(D) 1730
(E) 1740

5.6. For a group of 100 lives age x with independent future lifetimes, you are given:
(i) Each life is to be paid 1 at the beginning of each year, if alive
(ii) Ax = 0.45
2
(iii) A x = 0.22
(iv) i = 0.05
(v) Y is the present value random variable of the aggregate payments.
Using the normal approximation to Y, calculate the initial size of the fund needed in order
to be 95% certain of being able to make the payments for these life annuities.
(A) 1170
(B) 1180
(C) 1190
(D) 1200
(E) 1210
5.7. You are given:

(i) A35 = 0.188
(ii) A65 = 0.498
(iii) 30 p35 = 0.883
(iv) i = 0.04
Calculate 1000 a35:30
(2)
using the two-term Woolhouse approximation.
(A) 17,060
(B) 17,310
(C) 17,380
(D) 17,490
(E) 17,530

5.8. For an annual whole life annuity-due of 1 with a 5-year certain period on (55), you are
given:
(ii) i = 0.05
Calculate the probability that the sum of the undiscounted payments actually made under
this annuity will exceed the expected present value, at issue, of the annuity.
(A) 0.88
(B) 0.90
(C) 0.92
(D) 0.94
(E) 0.96
5.9. For a select and ultimate mortality model with a one-year select period, you are given:
(i) p [ x=] (1 + k ) p x , for some constant k
(ii) ax:n = 21.854
(iii) a[ x]:n = 22.167
Calculate k.
(A) 0.005
(B) 0.010
(C) 0.015
(D) 0.020
(E) 0.025

5.10. For a 10-year certain and life annuity-due on (65) with annual payments you are given:
i) Mortality follows the Standard Ultimate Life Table

ii) i = 0.05
Calculate the probability that the sum of the payments on a non-discounted basis made
under the annuity will exceed the expected present value of the annuity at issue.
A) 0.826
B) 0.836
C) 0.846
D) 0.856
E) 0.866
5.11. For a 3-year temporary life annuity due, you are given:
i) The life annuity pays 10 at the beginning of each year

ii) v = 0.93
iii)
= px 0.95,= px +1 0.9,
= px + 2 0.8
Calculate the standard deviation of the present value random variable for this annuity.
A) 4.4
B) 4.5
C) 4.6
D) 4.7
E) 4.8

5.12. For a life annuity-due issued to (55), you are given:
i) The annuity pays an annual benefit of X through age 64

ii) Beginning at age 65, the annuity pays 75% of X
iii) The present value of this annuity is 250,000
iv) Mortality follows the Standard Ultimate Life Table
v) i = 0.05
Calculate X.
(A) 17,400
(B) 17,500
(C) 17,600
(D) 17,700
(E) 17,800

6.1. You are given the following information about a special fully discrete 2-payment, 2-year
term insurance on (80):
(ii) i = 0.03
(iii) The death benefit is 1000 plus a return of all premiums paid without interest
(iv) Level premiums are calculated using the equivalence principle
Calculate the net premium for this special insurance.
(A) 32
(B) 33
(C) 34
(D) 35
(E) 36

6.2. For a fully discrete 10-year term life insurance policy on (x), you are given:
(i) Death benefits are 100,000 plus the return of all gross premiums paid without
interest
(ii) Expenses are 50% of the first year’s gross premium, 5% of renewal gross
premiums and 200 per policy expenses each year
(iii) Expenses are payable at the beginning of the year
(iv) A 1x:10 = 0.17094
(v) ( IA) 1x:10 = 0.96728
(vi) ax:10 = 6.8865
Calculate the gross premium using the equivalence principle.
(A) 3200
(B) 3300
(C) 3400
(D) 3500
(E) 3600

6.3. S, now age 65, purchased a 20-year deferred whole life annuity-due of 1 per year at age
45. You are given:
(i) Equal annual premiums, determined using the equivalence principle, were paid at
the beginning of each year during the deferral period
(ii) Mortality at ages 65 and older follows the Standard Ultimate Life Table
(iii) i = 0.05
(iv) Y is the present value random variable at age 65 for S’s annuity benefits
Calculate the probability that Y is less than the actuarial accumulated value of S’s
premiums.
(A) 0.35
(B) 0.37
(C) 0.39
(D) 0.41
(E) 0.43

6.4. For whole life annuities-due of 15 per month on each of 200 lives age 62 with
independent future lifetimes, you are given:
(i) i = 0.06
(12 ) (12 )
(ii) A 62 = 0.4075 and 2 A 62 = 0.2105
(iii) π is the single premium to be paid by each of the 200 lives
(iv) S is the present value random variable at time 0 of total payments made to the 200
lives
Using the normal approximation, calculate π such that Pr(200 π > S ) =
0.90 .
(A) 1850
(B) 1860
(C) 1870
(D) 1880
(E) 1890
6.5. For a fully discrete whole life insurance of 1000 on (30), you are given:
(ii) i = 0.05
(iii) The premium is the net premium
Calculate the first year for which the expected present value at issue of that year’s
premium is less than the expected present value at issue of that year’s benefit.
(A) 21
(B) 25
(C) 29
(D) 33
(E) 37

6.6. For fully discrete whole life insurance policies of 10,000 issued on 600 lives with
independent future lifetimes, each age 62, you are given:

(ii) i = 0.05
(iii) Expenses of 5% of the first year gross premium are incurred at issue
(iv) Expenses of 5 per policy are incurred at the beginning of each policy year
(v) The gross premium is 103% of the net premium.
(vi) 0 L is the aggregate present value of future loss at issue random variable
Calculate Pr( 0 L < 40, 000), using the normal approximation.
(A) 0.75
(B) 0.79
(C) 0.83
(D) 0.87
(E) 0.91

6.7. For a special fully discrete 20-year endowment insurance on (40), you are given:
(i) The only death benefit is the return of annual net premiums accumulated with
interest at 5% to the end of the year of death
(ii) The endowment benefit is 100,000
(iii) Mortality follows the Standard Ultimate Life Table
(iv) i = 0.05
Calculate the annual net premium.
(A) 2680
(B) 2780
(C) 2880
(D) 2980
(E) 3080

6.8. For a fully discrete whole life insurance on (60), you are given:
(ii) i = 0.05
(iii) The expected company expenses, payable at the beginning of the year, are:
• 50 in the first year
• 10 in years 2 through 10
• 5 in years 11 through 20
• 0 after year 20
Calculate the level annual amount that is actuarially equivalent to the expected company
expenses.
(A) 7.5
(B) 9.5
(C) 11.5
(D) 13.5
(E) 15.5

6.9. For a fully discrete 20-year term insurance of 100,000 on (50), you are given:
(i) Gross premiums are payable for 10 years
(iii) i = 0.05
(iv) Expenses are incurred at the beginning of each year as follows:
Year 1 Years 2-10 Years 11-20
Commission as % of premium 40% 10% Not applicable
Premium taxes as % of premium 2% 2% Not applicable
Maintenance expenses 75 25 25
(v) Gross premiums are calculated using the equivalence principle

Calculate the gross premium for this insurance.
(A) 617
(B) 627
(C) 637
(D) 647
(E) 657

6.10. For a fully discrete 3-year term insurance of 1000 on (x), you are given:
(i) p x = 0.975
(ii) i = 0.06
(iii) The actuarial present value of the death benefit is 152.85
(iv) The annual net premium is 56.05
Calculate p x + 2 .
(A) 0.88
(B) 0.89
(C) 0.90
(D) 0.91
(E) 0.92

6.11. For fully discrete whole life insurances of 1 issued on lives age 50, the annual net
premium, P, was calculated using the following:
(i) q 50 = 0.0048
(ii) i = 0.04
(iii) A51 = 0.39788
A particular life has a first-year mortality rate 10 times the rate used to calculate P. The
mortality rates for all other years are the same as the ones used to calculate P.
Calculate the expected present value of the loss at issue random variable for this life,
based on the premium P.
(A) 0.025
(B) 0.033
(C) 0.041
(D) 0.049
(E) 0.057

6.12. For a fully discrete whole life insurance of 1000 on (x), you are given:
(i) The following expenses are incurred at the beginning of each year:
Year 1 Years 2+
Percent of premium 75% 10%
Maintenance expenses 10 2
(ii) An additional expense of 20 is paid when the death benefit is paid

(iii) The gross premium is determined using the equivalence principle
(iv) i = 0.06
(v) ax = 12.0
2
(vi) A x = 0.14
Calculate the variance of the loss at issue random variable.
(A) 14,600
(B) 33,100
(C) 51,700
(D) 70,300
(E) 88,900

6.13. For a fully discrete whole life insurance of 10,000 on (45), you are given:
(i) Commissions are 80% of the first year premium and 10% of subsequent
premiums. There are no other expenses
(iii) i = 0.05
(iv) 0 L denotes the loss at issue random variable
(v) If T 45 = 10.5, then 0 L = 4953
Calculate E [ 0 L ] .
(A) −580
(B) −520
(C) −460
(D) −400
(E) −340
6.14. For a special fully discrete whole life insurance of 100,000 on (40), you are given:
(i) The annual net premium is P for years 1 through 10, 0.5P for years 11 through 20,
and 0 thereafter
(iii) i = 0.05
Calculate P.
(A) 850
(B) 950
(C) 1050
(D) 1150
(E) 1250

6.15. For a fully discrete whole life insurance of 1000 on (x) with net premiums payable
quarterly, you are given:
(i) i = 0.05
(ii) ax = 3.4611
(iii) P (W ) and P (UDD ) are the annualized net premiums calculated using the 2-term
Woolhouse (W) and the uniform distribution of deaths (UDD) assumptions,
respectively
P (UDD )
Calculate .
P (W )
(A) 1.000
(B) 1.002
(C) 1.004
(D) 1.006
(E) 1.008

6.16. For a fully discrete 20-year endowment insurance of 100,000 on (30), you are given:
(i) d = 0.05
(ii) Expenses, payable at the beginning of each year, are:
First Year Renewal Years
Percent of Per Percent of Per
Premium Policy Premium Policy
Taxes 4% 0 4% 0
Sales Commission 35% 0 2% 0
Policy Maintenance 0% 250 0% 50
(iii) The net premium is 2143

(A) 2410
(B) 2530
(C) 2800
(D) 3130
(E) 3280

6.17. An insurance company sells special fully discrete two-year endowment insurance policies
to smokers (S) and non-smokers (NS) age x. You are given:
(i) The death benefit is 100,000; the maturity benefit is 30,000
(ii) The level annual premium for non-smoker policies is determined by the
equivalence principle
(iii) The annual premium for smoker policies is twice the non-smoker annual premium
(iv) µ xNS+t = 0.1, t > 0
(v) q xS+ k = 1.5q xNS+ k for k = 0, 1
(vi) i = 0.08
Calculate the expected present value of the loss at issue random variable on a smoker
policy.
(A) –30,000
(B) –29,000
(C) –28.000
(D) –27.000
(E) –26.000

6.18. For a 20-year deferred whole life annuity-due with annual payments of 30,000 on (40),
you are given:
(i) The single net premium is refunded without interest at the end of the year of death
if death occurs during the deferral period
(iii) i = 0.05
Calculate the single net premium for this annuity.
(A) 162,000
(B) 164,000
(C) 165,200
(D) 166,400
(E) 168,800
(i) Expenses of 0.20 at the start of the first year and 0.01 at the start of each renewal
year are incurred
(iii) i = 0.05
(iv) Gross premiums are determined using the equivalence principle.
Calculate the variance of L 0 , the gross loss-at-issue random variable.
0.023
0.028
0.033
0.038
0.043

6.20. For a special fully discrete 3-year term insurance on (75), you are given:
(i) The death benefit during the first two years is the sum of the net premiums paid
without interest
(ii) The death benefit in the third year is 10,000
(iii)
x px
75 0.90
76 0.88
77 0.85
(iv) i = 0.04
(A) 449
(B) 459
(C) 469
(D) 479
(E) 489

(i) The death benefit is 1000
(ii) The endowment benefit is the sum of the net premiums paid without interest
(iii) d = 0.04
(iv) A75:15 = 0.70
(v) A75:151 = 0.11
(A) 80
(B) 90
(C) 100
(D) 110
(E) 120
6.22. For a whole life insurance of 100,000 on (45) with premiums payable monthly for a
period of 20 years, you are given:
(i) The death benefit is paid immediately upon death
(iii) Deaths are uniformly distributed over each year of age
(iv) i = 0.05
Calculate the monthly net premium.
(A) 98
(B) 100
(C) 102
(D) 104
(E) 106

6.23. For fully discrete 30-payment whole life insurance policies on (x), you are given:
(i) The following expenses payable at the beginning of the year:
Years Years Years 31
1st Year
2 – 15 16 – 30 and after
Per policy 60 30 30 30
Percent of premium 80% 20% 10% 0%
(ii) ax = 15.3926
(iii) ax:15 = 10.1329
(iv) ax:30 = 14.0145
(v) Annual gross premiums are calculated using the equivalence principle
(vi) The annual gross premium is expressed as kF + h, where F is the death benefit
and k and h are constants for all F
Calculate h.
(A) 30.3
(B) 35.1
(C) 39.9
(D) 44.7
(E) 49.5

6.24. For a fully continuous whole life insurance of 1 on (x), you are given:
(i) L is the present value of the loss at issue random variable if the premium rate is
determined by the equivalence principle
(ii) L* is the present value of the loss at issue random variable if the premium rate is
0.06
(iii) δ = 0.07
(iv) A x = 0.30
(v) Var ( L) = 0.18

Calculate Var ( L*).
(A) 0.18
(B) 0.21
(C) 0.24
(D) 0.27
(E) 0.30

6.25. For a fully discrete 10-year deferred whole life annuity-due of 1000 per month on (55), you are
given:
(i) The premium, G, will be paid annually at the beginning of each year during the deferral
period
(ii) Expenses are expected to be 300 per year for all years, payable at the beginning of the
year
(iv) i = 0.05
(v) Using the two-term Woolhouse approximation, the expected loss at issue is –800
Calculate G.
(A) 12,110
(B) 12,220
(C) 12,330
(D) 12,440
(E) 12,550

6.26. For a special fully discrete whole life insurance policy of 1000 on (90), you are given:
(i) The first year premium is 0
(ii) P is the renewal premium
(iv) i = 0.05
(v) Premiums are calculated using the equivalence principle
Calculate P.
(A) 150
(B) 160
(C) 170
(D) 180
(E) 190

6.27. For a special fully continuous whole life insurance on (x), you are given:
(i) Premiums and benefits:
First 20 years After 20 years
Premium Rate 3P P
Benefit 1,000,000 500,000
(ii) µ x +t = 0.03, t ≥ 0
(iii) δ = 0.06
Calculate P using the equivalence principle.
(A) 10,130
(B) 10,190
(C) 10,250
(D) 10,310
(E) 10,370

6.28. For a fully discrete 5-payment whole life insurance of 1000 on (40), you are given:
(i) Expenses incurred at the beginning of the first five policy years are as follows:
Year 1 Years 2-5
Percent Per Percent Per
of premium policy of premium policy
Sales Commissions 20% 0 5% 0
Policy Maintenance 0% 10 0% 5
(ii) No expenses are incurred after Year 5

(iv) i = 0.05
(A) 31
(B) 36
(C) 41
(D) 46
(E) 51

6.29. (35) purchases a fully discrete whole life insurance policy of 100,000.
You are given:
(i) The annual gross premium, calculated using the equivalence principle, is 1770
(ii) The expenses in policy year 1 are 50% of premium and 200 per policy
(iii) The expenses in policy years 2 and later are 10% of premium and 50 per policy
(iv) All expenses are incurred at the beginning of the policy year
(v) i = 0.035
Calculate a35 .
(A) 20.0
(B) 20.5
(C) 21.0
(D) 21.5
(E) 22.0

(i) The first year expense is 10% of the gross annual premium
(ii) Expenses in subsequent years are 5% of the gross annual premium
(iii) The gross premium calculated using the equivalence principle is 2.338
(iv) i = 0.04
(v) ax = 16.50
2
(vi) A x = 0.17
Calculate the variance of the loss at issue random variable.
(A) 900
(B) 1200
(C) 1500
(D) 1800
(E) 2100

6.31. For a fully continuous whole life insurance policy of 100,000 on (35), you are given:
(i) The density function of the future lifetime of a newborn:
0.01e −0.01t , 0 ≤ t < 70
f (t ) = 
 g (t ), t ≥ 70
(ii) δ = 0.05
(iii) A70 = 0.51791
Calculate the annual net premium rate for this policy.
(A) 1000
(B) 1110
(C) 1220
(D) 1330
(E) 1440
6.32. For a whole life insurance of 100,000 on (x), you are given:
(iii) Premiums are payable monthly
(iv) i = 0.05
(v) ax = 9.19
Calculate the monthly net premium.
(A) 530
(B) 540
(C) 550
(D) 560
(E) 570

6.33. An insurance company sells 15-year pure endowments of 10,000 to 500 lives, each age x, with
independent future lifetimes. The single premium for each pure endowment is determined by the
equivalence principle.
(i) You are given:
(ii) i = 0.03
µ x (t ) 0.02t , t ≥ 0
(iii) =
(iv) 0 L is the aggregate loss at issue random variable for these pure endowments.
Using the normal approximation without continuity correction, calculate Pr ( 0 L > 50, 000 ) .
(A) 0.08
(B) 0.13
(C) 0.18
(D) 0.23
(E) 0.28

6.34. For a fully discrete whole life insurance policy on (61), you are given:
(i) The annual gross premium using the equivalence principle is 500
(ii) Initial expenses, incurred at policy issue, are 15% of the premium
(iii) Renewal expenses, incurred at the beginning of each year after the first, are 3% of the
premium
(iv) Mortality follows the Standard Ultimate Life Table
(v) i = 0.05
Calculate the amount of the death benefit.
(A) 23,300
(B) 23,400
(C) 23,500
(D) 23,600
(E) 23,700
6.35. For a fully discrete whole life insurance policy of 100,000 on (35), you are given:
(i) First year commissions are 19% of the annual gross premium
(ii) Renewal year commissions are 4% of the annual gross premium
(iv) i = 0.05
Calculate the annual gross premium for this policy using the equivalence principle.
(A) 410
(B) 450
(C) 490
(D) 530
(E) 570

6.36. For a fully continuous 20-year term insurance policy of 100,000 on (50), you are given:
(i) Gross premiums, calculated using the equivalence principle, are payable at an annual rate
of 4500
(ii) Expenses at an annual rate of R are payable continuously throughout the life of the policy
µ50+t 0.04, for t > 0
(iii)=
(iv) δ = 0.08
Calculate R.
(A) 400
(B) 500
(C) 600
(D) 700
(E) 800
6.37. For a fully discrete whole life insurance policy of 50,000 on (35), with premiums payable for a
maximum of 10 years, you are given:
(i) Expenses of 100 are payable at the end of each year including the year of death
(iii) i = 0.05
Calculate the annual gross premium using the equivalence principle.
(A) 790
(B) 800
(C) 810
(D) 820
(E) 830

6.38. For an n-year endowment insurance of 1000 on (x), you are given:
(ii) Premiums are payable annually at the beginning of each year
(iv) i = 0.05
(v) n Ex = 0.172
(vi) Ax:n = 0.192
Calculate the annual net premium for this insurance.
(A) 10.1
(B) 11.3
(C) 12.5
(D) 13.7
(E) 14.9

6.39. XYZ Insurance writes 10,000 fully discrete whole life insurance policies of 1000 on lives age 40
and an additional 10,000 fully discrete whole life policies of 1000 on lives age 80.
XYZ used the following assumptions to determine the net premiums for these policies:
(ii) i = 0.05
During the first ten years, mortality did follow the Standard Ultimate Life Table.
Calculate the average net premium per policy in force received at the beginning of the eleventh
year.
(A) 29
(B) 32
(C) 35
(D) 38
(E) 41
6.40. For a special fully discrete whole life insurance, you are given:
The death benefit is 1000(1.03) for death in policy year k , for k = 1, 2, 3...
k
(i)
(ii) qx = 0.05
(iii) i = 0.06
(iv) ax +1 = 7.00
(v) The annual net premium for this insurance at issue age x is 110
Calculate the annual net premium for this insurance at issue age x + 1.
(A) 110
(B) 112
(C) 116
(D) 120
(E) 122


6.41. For a special fully discrete 2-year term insurance on (x), you are given:
(i) qx = 0.01
(ii) qx +1 = 0.02
(iii) i = 0.05
(iv) The death benefit in the first year is 100,000
(v) Both the benefits and premiums increase by 1% in the second year
Calculate the annual net premium in the first year.
(A) 1410
(B) 1417
(C) 1424
(D) 1431
(E) 1438
6.42. For a fully discrete 3-year endowment insurance of 1000 on (x), you are given:
(i) µ x +t = 0.06 , for 0 ≤ t ≤ 3
(ii) δ = 0.06
(iii) The annual premium is 315.80
(iv) L0 is the present value random variable for the loss at issue for this insurance
Calculate Pr[ L0 > 0] .
(A) 0.03
(B) 0.06
(C) 0.08
(D) 0.11
(E) 0.15

6.43. For a fully discrete, 5-payment 10-year term insurance of 200,000 on (30), you are given:
(ii) The following expenses are incurred at the beginning of each respective year:
Year 1 Years 2 - 10
Percent of Percent of
Per Policy Per Policy
Premium Premium
Taxes 5% 0 5% 0
Commissions 30% 0 10% 0
Maintenance 0% 8 0% 4
(iii) i = 0.05
(iv) a30:5 = 4.5431
Calculate the annual gross premium using the equivalence principle.
(A) 150
(B) 160
(C) 170
(D) 180
(E) 190

6.44. For a special fully discrete 10-year deferred whole life insurance of 100 on (50), you are given:
(i) Premiums are payable annually, at the beginning of each year, only during the deferral
period
(ii) For deaths during the deferral period, the benefit is equal to the return of all premiums
paid, without interest
(iii) i = 0.05
(iv) a50 = 17.0
(v) a60 = 15.0

(vi) 10 E50 = 0.60
(vii) ( I A)50:10
1
= 0.15
Calculate the annual net premium for this insurance.
(A) 1.3
(B) 1.6
(C) 1.9
(D) 2.2
(E) 2.5

6.45. For a fully continuous whole life insurance of 100,000 on (35), you are given:
(i) The annual rate of premium is 560
(iv) i = 0.05
Calculate the 75th percentile of the loss at issue random variable for this policy.
(A) 610
(B) 630
(C) 650
(D) 670
(E) 690

6.46. For a special 10-year deferred whole life annuity-due of 300 per year issued to (55), you are
given:
(i) Annual premiums are payable for 10 years
(ii) If death occurs during the deferral period, all premiums paid are returned without interest
at the end of the year of death
(iii) a55 = 12.2758
(iv) a55:10 = 7.4575
(v) ( IA)55:10
1
= 0.51213
Calculate the level net premium.
(A) 195
(B) 198
(C) 201
(D) 204
(E) 208

6.47. For a 10-year deferred whole life annuity-due with payments of 100,000 per year on (70), you
are given:
(i) Annual gross premiums of G are payable for 10 years
(ii) First year expenses are 75% of premium
(iii) Renewal expenses for years 2 and later are 5% of premium during the premium paying
period
(iv) Mortality follows the Standard Ultimate Life Table
(v) i = 0.05
Calculate G using the equivalence principle.
(A) 64,900
(B) 65,400
(C) 65,900
(D) 66,400
(E) 66,900

6.48. For a special fully discrete 5-year deferred 3-year term insurance of 100,000 on (x) you are
given:
(i) There are two premium payments, each equal to P . The first is paid at the beginning of
the first year and the second is paid at the end of the 5-year deferral period
(ii) The following probabilities:
(iii) 5 px = 0.95
=
(iv) qx +5 0.02,
= qx + 6 0.03,
= qx + 7 0.04
(v) i = 0.06
Calculate P using the equivalence principle.
(A) 3195
(B) 3345
(C) 3495
(D) 3645
(E) 3895

6.49. For a special whole life insurance of 100,000 on (40), you are given:
(i) The death benefit is payable at the moment of death
(ii) Level gross premiums are payable monthly for a maximum of 20 years
(iv) i = 0.05
(v) Deaths are uniformly distributed over each year of age
(vi) Initial expenses are 200
(vii) Renewal expenses are 4% of each premium including the first
(viii) Gross premiums are calculated using the equivalence principle
Calculate the monthly gross premium.
(A) 66
(B) 76
(C) 86
(D) 96
(E) 106

6.50. On July 15, 2017, XYZ Corp buys fully discrete whole life insurance policies of 1,000 on each
of its 10,000 workers, all age 35. It uses the death benefits to partially pay the premiums for the
following year.
You are given:
(ii) i = 0.05
(iii) The insurance is priced using the equivalence principle
Calculate XYZ Corp’s expected net cash flow from these policies during July 2018.
(A) –47,000
(B) –48,000
(C) –49,000
(D) –50,000
(E) –51,000

6.51. For a special 10-year deferred whole life annuity-due of 50,000 on (62), you are given:
(i) Level annual net premiums are payable for 10 years
(ii) A death benefit, payable at the end of the year of death, is provided only over the deferral
period and is the sum of the net premiums paid without interest
(iii) a62 = 12.2758
(iv) a62:10 = 7.4574
(v) A62:10
1 = 0.0910
10
(vi) ∑A
k =1
1
62: k
= 0.4891
Calculate the net premium for this special annuity.
(A) 34,400
(B) 34,500
(C) 34,600
(D) 34,700
(E) 34,800
[A modified version of Question 14 on the Fall 2013 exam

6.52. For a fully discrete 10-payment whole life insurance of H on (45), you are given:
(i) Expenses payable at the beginning of each year are as follows:
Expense Type First Year Years 2-10 Years 11+
Per policy 100 20 10
% of Premium 105% 5% 0%

(iii) i = 0.05
(iv) The gross annual premium, calculated using the equivalence principle, is of the form
G gH + f , where g is the premium rate per 1 of insurance and f is the per policy fee
=
Calculate f.
(A) 42.00
(B) 44.20
(C) 46.40
(D) 48.60
(E) 50.80

6.53. A warranty pays 2000 at the end of the year of the first failure if a washing machine fails within
three years of purchase. The warranty is purchased with a single premium, G, paid at the time of
purchase of the washing machine.
You are given:
(i) 10% of the washing machines that are working at the start of each year fail by the end of
that year
(ii) i = 0.08
(iii) The sales commission is 35% of G
(iv) G is calculated using the equivalence principle
Calculate G.
(A) 630
(B) 660
(C) 690
(D) 720
(E) 750
(i) Mortality follows the Standard Ultimate Life Table.
(ii) i = 0.05
(iii) The annual premium is determined using the equivalence principle.
Calculate the standard deviation of L0 , the present value random variable for the loss at issue.
(A) 25,440
(B) 30,440
(C) 35,440
(D) 40,440
(E) 45,440

6.55. An insurer issues a special 20 payment insurance policy on (45) with the following benefits:
• A death benefit of 1000, payable at the end of year of death, provided death
occurs before age 65; and
• An annuity benefit that pays 2500 at the start of each year, starting at age 65
You are given:
i) Level annual premiums of P are paid at the beginning of each year
ii) Premiums are calculated based on the equivalence principle
iii) Mortality follows the Standard Ultimate Life Table
iv) i = 0.05
Calculate P.
(A) 872
(B) 896
(C) 920
(D) 944
(E) 968
6.56. An insurer issues a fully discrete 20-year endowment insurance policy of 1,000,000 on (35).
You are given:

i) First year expenses are 55% of the premium plus 150
ii) After the first year, expenses are 5% of the premium plus 50
iv) i = 0.05
v) Premiums are determined using the equivalence principle
Calculate the annual gross premium on this policy.

A) 29,000
B) 30,000
C) 31,000
D) 32,000
E) 33,000

7.1. For a special fully discrete whole life insurance on (40), you are given:
(i) The death benefit is 50,000 in the first 20 years and 100,000 thereafter
(ii) Level net premiums of 875 are payable for 20 years
(iv) i = 0.05
Calculate 10 V , the net premium policy value at the end of year 10 for this insurance.
(A) 11,090
(B) 11,120
(C) 11,150
(D) 11,180
(E) 11,210
7.2. A special fully discrete 2-year endowment insurance with a maturity value of 2000 is issued to
(x). The death benefit is 2000 plus the net premium policy value at the end of the year of death.
For year 2, the net premium policy value is the net premium policy value just before the maturity
benefit is paid.
You are given:
(i) i = 0.10
(ii) qx = 0.150 and qx +1 = 0.165
Calculate the level annual net premium.
(A) 1070
(B) 1110
(C) 1150
(D) 1190
(E) 1230

7.3. For a whole life insurance of 1000 with semi-annual premiums on (80), you are given:
(i) A gross premium of 60 is payable every 6 months starting at age 80
(ii) Commissions of 10% are paid each time a premium is paid
(iii) Death benefits are paid at the end of the quarter of death
(iv) t V denotes the gross premium policy value at time t, t ≥ 0
(v) 10.75 V = 753.72

(vi)
t l 90 + t
0 1000
0.25 898
0.50 800
0.75 706
(vii) i (4) = 0.08

Calculate V.
10.25
(A) 680
(B) 690
(C) 700
(D) 710
(E) 730

7.4. For a special fully discrete whole life insurance on (40), you are given:
(i) The death benefit is 1000 during the first 11 years and 5000 thereafter
(ii) Expenses, payable at the beginning of the year, are 100 in year 1 and 10 in years 2 and
later
(iii) π is the level annual premium, determined using the equivalence principle
(iv) G 1.02 × π is the level annual gross premium
=
(v) Mortality follows the Standard Ultimate Life Table
(vi) i = 0.05
(vii) 11 E40 = 0.57949
Calculate the gross premium policy value at the end of year 1 for this insurance.
(A) –82
(B) –74
(C) –66
(D) –58
(E) –50

7.5. For a fully discrete whole life insurance of 10,000 on (x), you are given:
(i) Deaths are uniformly distributed over each year of age
(ii) The net premium is 647.46
(iii) The net premium policy value at the end of year 4 is 1405.08
(iv) q x + 4 = 0.04561
(v) i = 0.03
Calculate the net premium policy value at the end of 4.5 years.
(A) 1570
(B) 1680
(C) 1750
(D) 1830
(E) 1900

7.6. For a fully discrete whole life insurance policy of 2000 on (45), you are given:
(i) The gross premium is calculated using the equivalence principle
(ii) Expenses, payable at the beginning of the year, are:
% of Premium Per 1000 Per Policy
First year 25% 1.5 30
Renewal years 5% 0.5 10

(iv) i = 0.05
Calculate the expense policy value at the end of policy year 10.
(A) –2
(B) –8
(C) –12
(D) –21
(E) –25

7.7. For a whole life insurance of 10,000 on (x), you are given:
(i) Death benefits are payable at the end of the year of death
(ii) A premium of 30 is payable at the start of each month
(iii) Commissions are 5% of each premium
(iv) Expenses of 100 are payable at the start of each year
(v) i = 0.05
(vi) 1000 A x +10 = 400
(vii) V is the gross premium policy value at the end of year 10 for this insurance
10
Calculate 10V using the two-term Woolhouse formula for annuities.
(A) 950
(B) 980
(C) 1010
(D) 1110
(E) 1140

7.8. For a fully discrete whole life insurance of 1000 on a select life [70], you are given:
(i) Ultimate mortality follows the Standard Ultimate Life Table
(ii) (0.7 + 0.1k ) q x + k , k =
During the three-year select period, q [ x ]+ k = 0, 1, 2
(iii) i = 0.05
(iv) The net premium for this insurance is 35.168
Calculate 1V , the net premium policy value at the end of year 1 for this insurance.
(A) 25.25
(B) 27.30
(C) 29.85
(D) 31.60
(E) 33.35
7.9. For a semi-continuous 20-year endowment insurance of 100,000 on (45), you are given:
(i) Net premiums of 253 are payable monthly
(iv) i = 0.05
(A) 38,100
(B) 38,300
(C) 38,500
(D) 38,700
(E) 38,900

(ii) i = 0.05
(iii) Commission expenses are 60% of the first year’s gross premium and 2% of renewal gross
premiums
(iv) Administrative expenses are 500 in the first year and 50 in each renewal year
(v) All expenses are payable at the start of the year
(vi) The gross premium, calculated using the equivalence principle, is 977.60
Calculate 5V e , the expense policy value at the end of year 5 for this insurance.
(A) –1070
(B) –1020
(C) –970
(D) –920
(E) –870

(i) i = 0.05
(ii) 0 L denotes the loss at issue random variable based on the net premium
(iii) If K 45 = 10, then 0 L = 4450
(iv) a55 = 13.4205
(A) 1010
(B) 1460
(C) 1820
(D) 2140
(E) 2300

(i) The death benefit is ( 26 − k ) for death in year k , for k = 1, 2,3 25
(ii) The endowment benefit in year 25 is 1

(iii) Net premiums are level
(iv) q 55 = 0.15
(v) i = 0.04
(vi) V , the net premium policy value at the end of year 11, is 5.00
11
(vii) V , the net premium policy value at the end of year 24, is 0.60
24
Calculate 12V , the net premium policy value at end of year 12.
(A) 3.63
(B) 3.74
(C) 3.88
(D) 3.98
(E) 4.09
7.13. For a fully discrete 30-year endowment insurance of 1000 on (40), you are given:
(ii) i = 0.05
Calculate the full preliminary term (FPT) reserve for this policy at the end of year 10.
(A) 180
(B) 185
(C) 190
(D) 195
(E) 200

(i) The gross premium policy value at duration 5 is 5500 and at duration 6 is 7100
(ii) q50 = 0.009
(iii) i = 0.05
(iv) Renewal expenses at the start of each year are 50 plus 4% of the gross premium.
(v) Claim expenses are 200.
Calculate the gross premium.
(A) 2200
(B) 2250
(C) 2300
(D) 2350
(E) 2400
(i) q x +15 = 0.10
(iii) i = 0.05
(iv) t V denotes the net premium policy value at time t
(v) 16 V = 49.78
Calculate V.
15.6
(A) 49.7
(B) 50.0
(C) 50.3
(D) 50.6
(E) 50.9


7.16. For a fully discrete 5-payment whole life insurance of 1000 on (80), you are given:
(i) The gross premium is 130
(ii) q80 + k = 0.01(k + 1), k = 0, 1, 2, ..,5
(iii) v = 0.95
(iv) 1000 A 86 = 683
(v) 3 L is the prospective loss random variable at time 3, based on the gross premium
Calculate E [ 3 L ] .
(A) 330
(B) 350
(C) 360
(D) 380
(E) 390

(i) q x +10 = 0.02067
(ii) v 2 = 0.90703
(iii) A x +11 = 0.52536
2
(iv) A x +11 = 0.30783
(v) k L is the prospective loss random variable at time k

Var ( 10 L )
Calculate .
Var ( 11 L )
(A) 1.006
(B) 1.010
(C) 1.014
(D) 1.018
(E) 1.022
(i) The net premium policy value at the end of the first year is 0.012
(ii) qx = 0.009
(iii) i = 0.04
 x .
Calculate a
(A) 17.1
(B) 17.6
(C) 18.1
(D) 18.6
(E) 19.1

7.19. For a fully discrete whole life insurance of 100,000 on (40) you are given:
(i) Expenses incurred at the beginning of the first year are 300 plus 50% of the first year
premium
(ii) Renewal expenses, incurred at the beginning of the year, are 10% of each of the renewal
premiums
(iv) i = 0.05
(v) Gross premiums are calculated using the equivalence principle
Calculate the gross premium policy value for this insurance immediately after the second
premium and associated renewal expenses are paid.
(A) 200
(B) 340
(C) 560
(D) 720
(E) 1060

(i) First year expenses are 30% of the gross premium plus 300
(ii) Renewal expenses are 4% of the gross premium plus 30
(iii) All expenses are incurred at the beginning of the policy year
(iv) Gross premiums are calculated using the equivalence principle
(v) The gross premium policy value at the end of the first policy year is R
(vi) Using the Full Preliminary Term Method, the modified net premium reserve at the end of
the first policy year is S
(vii) Mortality follows the Standard Ultimate Life Table
(viii) i = 0.05
Calculate R − S .
(A) −280
(B) −140
(C) 0
(D) 140
(E) 280

7.21. A special fully discrete 10-payment 10-year deferred whole life annuity-due on (55) of 1000 per
year provides for a return of premiums without interest in the event of death within the first 10
years. You are given:
(i) Annual net premiums are level
(iii) i = 0.05
(iv) ( IA)55:10
1 = 0.14743
Calculate 9V , the net premium policy value at the end of year 9.
(A) 11,540
(B) 11,650
(C) 11,760
(D) 11,870
(E) 11,980

7.22. For two fully discrete whole life insurance policies on (x), you are given:
(i)
Death Annual Net Variance of
Benefit Premium Loss at Issue
Policy 1 8 1.250 20.55
Policy 2 12 1.875 W
(ii) i = 0.06
(iii) The two policies are priced using the same mortality table.
Calculate W.
(A) 30.8
(B) 38.5
(C) 46.2
(D) 53.9
(E) 61.6

7.23. For a 40-year endowment insurance of 10,000 issued to (25), you are given:
(i) i = 0.04
(ii) p25 = 0.995
(iii) a25:20 = 11.087
(iv) a25:40 = 16.645
(v) The annual level net premium is 216

(vi) A modified net premium reserving method is used for this policy, where the valuation
premiums are:
• A first year premium equal to the first year net cost of insurance,
• Level premiums of β for years 2 through 20, and
• Level premiums of 216 thereafter.
Calculate β .
(A) 140
(B) 170
(C) 200
(D) 230
(E) 260

7.24. For a fully discrete whole life insurance policy of 1,000,000 on (50), you are given:
(i) The annual gross premium, calculated using the equivalence principle, is 11,800
(iii) i = 0.05
Calculate the expense loading, P , for this policy.
e
(A) 480
(B) 580
(C) 680
(D) 780
(E) 880

7.25. For a fully discrete whole life insurance policy of 100,000 on [55], a professional skydiver, you
are given:
(i) Level premiums are paid annually
(ii) Mortality follows a 2-year select and ultimate table
(iii) i = 0.04
(iv) The following table of values for A[ x]+t :
x A[ x] A[ x]+1 Ax+2
55 0.23 0.24 0.25
56 0.25 0.26 0.27
57 0.27 0.28 0.29
58 0.29 0.30 0.31
Calculate the Full Preliminary Term reserve at time 3.
(A) 2700
(B) 3950
(C) 5200
(D) 6450
(E) 7800

7.26. For a special fully discrete 2-year endowment insurance on (x), you are given:
(i) The death benefit for year k is 25,000k plus the net premium policy value at the end of
year k, for k = 1, 2. For year 2, this net premium policy value is the net premium policy
value just before the maturity benefit is paid
(ii) The maturity benefit is 50,000
(iii) p x p=
= x +1 0.85
(iv) i = 0.05
(v) P is the level annual net premium
Calculate P.
(A) 27,650
(B) 27,960
(C) 28,200
(D) 28,540
(E) 28,730

7.27. The gross annual premium, G, for a fully discrete 5-year endowment insurance of 1000 issued on
( x) is calculated using the equivalence principle. You are given:
(i) 1000 Px: 5 = 187.00
(ii) The expense policy value at the end of the first year, 1V e = −38.70
(iii) qx = 0.008
(iv) Expenses, payable at the beginning of the year, are:
Percent of
Year Per Policy
Premium
First 25% 10
Renewal 5% 5
(v) i = 0.03
Calculate G.
(A) 200
(B) 213
(C) 226
(D) 239
(E) 252

7.28. For a special fully discrete whole life insurance of 1,000 on (45), you are given:
(i) The net premiums for year k are:
 P, k = 1, 2, ..., 20

P + W , k = 21, 22, ...
(iii) i = 0.05
(iv) V , the net premium policy value at the end of the 20th year, is 0
20
Calculate W .
(A) 12
(B) 16
(C) 20
(D) 24
(E) 28

7.29. For a fully discrete whole life insurance of B on ( x) , you are given:
(i) Expenses, incurred at the beginning of each year, equal 30 in the first year and 5 in
subsequent years
(ii) The net premium policy value at the end of year 10 is 2290
(iii) Gross premiums are calculated using the equivalence principle
(iv) i = 0.04
(v) ax = 14.8
(vi) ax +10 = 11.4
Calculate 10V g , the gross premium policy value at the end of year 10.
(A) 2190
(B) 2210
(C) 2230
(D) 2250
(E) 2270

7.30. Ten years ago J, then age 25, purchased a fully discrete 10-payment whole life policy of 10,000.
All actuarial calculations for this policy were based on the following:
(ii) i = 0.05
(iii) The equivalence principle
In addition:
(i) L10 is the present value of future losses random variable at time 10.
(ii) At the end of policy year 10, the interest rate used to calculate L10 is changed to 0%.
Calculate the increase in E[ L10 ] that results from this change.
(A) 5035
(B) 6035
(C) 7035
(D) 8035
(E) 9035

7.31. For a fully discrete 3-year endowment insurance of 1000 on (x), you are given:
(i) Expenses, payable at the beginning of the year, are:
Year(s) Percent of Premium Per Policy
1 20% 15
2 and 3 8% 5
(ii) The expense policy value at the end of year 2 is –23.64

(iii) The gross annual premium calculated using the equivalence principle is G = 368.05
e
(iv)
= G 1000 Px:3 + P e , where P is the expense loading
Calculate Px:3 .
(A) 0.290
(B) 0.295
(C) 0.300
(D) 0.305
(E) 0.310

7.32 For two fully continuous whole life insurance policies on (x), you are given:
(i)
Death Annual Variance of the Present
Benefit Premium Rate Value of Future Loss at t
Policy A 1 0.10 0.455
Policy B 2 0.16 -
(ii) δ = 0.06
Calculate the variance of the present value of future loss at t for Policy B.
(A) 0.9
(B) 1.4
(C) 2.0
(D) 2.9
(E) 3.4
7.33 For a special semi-continuous 20-year endowment insurance on (70), you are given:
i) The death benefit is 1000

ii) The endowment benefit is 500
iv) Deaths are uniformly distributed over each year of age
v) The annual net premium is 35.26
vi) i = 0.05
Calculate the net premium policy value at the end of year 10.
(A) 268
(B) 272
(C) 276
(D) 280
(E) 284

7.34 An insurer issues a 30-year term insurance policy on (40). You are given:
i) Net premiums of 750 are payable quarterly

ii) The death benefit, payable at the end of the quarter of death, is 1,000,000
iii) t V denotes the net premium policy value at time t, t ≥ 0
iv) 10.5V = 10, 000
v) q50 = 0.01
vi) Mortality is uniformly distributed over each year of age
vii) i = 0.05
Calculate 10.75V .
A) 8,360
B) 8,370
C) 8,380
D) 8,390
E) 8,400
7.35 For a fully discrete whole life insurance of 100,000 on (60), you are given:
i) Reserves are determined using a modified net premium reserve method
ii) The modified net premium reserve at the end of year 2 is 0
iii) Valuation premiums in years 3 and later are level
v) i = 0.05
Calculate the valuation premium for year 5.
(A) 1,950
(B) 2,050
(C) 2,120
(D) 2,190
(E) 2,290

7.36 You are checking gross premium policy values for a fully discrete whole life insurance of 1000
on (50).
kV denotes the gross premium policy value at the end of year k, k = 0,1,2,… .
The valuation assumptions were intended to include:
i) There are commissions and maintenance expenses payable at the beginning of the
year
ii) There are no other expenses
iii) q58 = 0.002736
iv) i = 0.05
You discover that all intended assumptions were used correctly, except that calculations were
based on q58 = 0.003736 .
The calculated results included 8V = 86.74 and 9V = 100 .
Calculate 8V using the intended value of q58 .

(A) 85.79
(B) 85.88
(C) 85.97
(D) 86.06
(E) 86.15
7.37 For a fully discrete increasing 20-year endowment insurance on (50), you are given:
i) The level annual net premium is 5,808

ii) The net premium policy value at the end of year 15 is 130,580
iii) Mortality after age 60 follows the Standard Ultimate Life Table
iv) i = 0.05
Calculate the expected present value of future death and endowment benefits at age 65.
(A) 156,530
(B) 156,570
(C) 156,610
(D) 156,650
(E) 156,690

7.38 For a fully discrete 30 payment whole life insurance of 1000 on (50) with level annual premiums
of 16, k V denotes the gross premium policy value at the end of year k, k = 0,1,2,… .
The original valuation assumptions include:
i) Mortality follows the Standard Ultimate Life Table

ii) i = 0.05
iii) Premium taxes are 2%
iv) There are commissions and various other expenses
Using the original valuation assumptions, 10V = 110 .

At some point prior to year 10, your jurisdiction increased the premium tax rate so the premium
tax assumption increased to 3%. All other assumptions are unchanged.
Calculate the revised value of 10V .

(A) 112
(B) 114
(C) 116
(D) 118
(E) 120
7.39 An insurer issues a 20-year deferred whole life annuity due on [45]. You are given:
i) Net premiums of 20,000 are payable at the beginning of each year during the
deferral period
ii) There is no benefit paid upon death during the deferral period
iii) t V denotes the net premium policy value at time t, t ≥ 0
iv) 19V = 575, 000
v) q[45]+18 = 0.023044
vi) i = 0.05
Calculate 18V .
A) 495,000
B) 505,000
C) 515,000
D) 525,000
E) 535,000

7.40 For a fully discrete whole life insurance of 1000 on (60), you are given:
i) Reserves are determined using a modified net premium reserve method

ii) The modified reserve at the end of year 2 is 0
iii) Valuation premiums in years 3 and later are level
v) i = 0.05
Calculate the modified net premium reserve at the end of year 5.

(A) 58
(B) 69
(C) 79
(D) 90
(E) 99
18.1. An insurer is modelling time to death of lives insured at age x using the Kaplan-Meier estimator.
You are given the following information.
(i) There were 100 policies in force at time 0
(ii) There were no new policies entering the study
(iii) At time 10.0, immediately after a death, there were 50 policies remaining in force
(iv) The Kaplan-Meier estimate of the survival function for death at time 10 is Sˆ (10.0) = 0.92
(v) The next death after time 10.0 occurred when there was one death at time 10.8
(vi) During the period from time 10.0 to time 10.8, a total of 10 policies terminated for
reasons other than death
Calculate Sˆ (10.8) , the Kaplan-Meier estimate of the survival function S (10.8).
(A) 0.897
(B) 0.903
(C) 0.909
(D) 0.910
(E) 0.920

18.2. In a study of 1,000 people with a particular illness, 200 died within one year of diagnosis.
Calculate a 95% (linear) confidence interval for the one-year empirical survival function.
(A) (0.745, 0.855)

(B) (0.755, 0.845)
(C) (0.765, 0.835)
(D) (0.775, 0.825)
(E) (0.785, 0.815)
18.3. A cohort of 100 newborns is observed from birth. During the first year, 10 drop out of the study
and one dies at time 1. Eight more drop out during the next six months, then, at time 1.5, three
deaths occur.
Calculate Sˆ (1.5) , the Nelson-Aalen estimator of the survival function, S (1.5).
(A) 0.950
(B) 0.951
(C) 0.952
(D) 0.953
(E) 0.954

18.4. You are given the following data based on 60 lives at time 0:
Exits in Entrants in
j 𝑡𝑡(𝑗𝑗) Deaths at t(j) + − + −
(𝑡𝑡(𝑗𝑗) , 𝑡𝑡(𝑗𝑗+1) ) (𝑡𝑡(𝑗𝑗) , 𝑡𝑡(𝑗𝑗+1) )
0 0 0
1 5.3 1 8 1
2 8.6 1 6 7
3 13.2 2 7 7
4 16.1 1 6 5
5 21.0 1 6 4
Calculate the upper limit of the 80% linear confidence interval for S(21.0) using the Kaplan-
Meier estimate and Greenwood’s approximation.
(A) 0.872
(B) 0.893
(C) 0.915
(D) 0.944
(E) 0.968

18.5. In a mortality study, the following grouped death data were collected from 100 lives, all studied
beginning at age 40.
Age last birthday at death Number of deaths

40–49 10
50–59 14
60–69 16
70–79 20
80 and higher 40
There were no terminations other than death.

Calculate Sˆ40 (32) using the ogive empirical distribution function.
(A) 0.44
(B) 0.48
(C) 0.52
(D) 0.56
(E) 0.60

18.6 You are doing a mortality study of insureds between ages 70 and 90. Two specific lives
contributed this data to the study:
Life Age at Entry Age at Exit Cause of exit

1 70.0 90.0 End of study
2 70.0 Between 89.0 and 90.0 Death
You assume mortality follows Gompertz law µ x= B × c x and plan to use maximum likelihood
estimation.
L is the likelihood function associated with these two lives.
L* denotes the value of L if the Gompertz parameters are B = 0.000003 and c = 1.1.
Calculate L*.
(A) 0.0115
(B) 0.0131
(C) 0.0147
(D) 0.0163
(E) 0.0179

18.7 You are doing a mortality study of insureds between ages 60 and 90. Two specific lives
contributed this data to the study:
Life Age at Entry Age at Exit Cause of exit

1 60.0 74.5 Policy lapsed
2 60.0 74.5 Death
You assume mortality follows Gompertz law µ x= B × c x and plan to use maximum likelihood
estimation.
L is the log-likelihood function (using natural logs) associated with these two lives.
L* denotes the value of L if the Gompertz parameters are B = 0.000004 and c = 1.12.
Calculate L*.
(A) -4,67
(B) -4.53
(C) -4.39
(D) -4.25
(E) -4.11
18.8 You are given the following seriatim data on survival times for a group of 12 lives. The
superscript + indicates a right-censored value.
25, 32+, 35+, 36, 40+, 44, 48, 60, 62+, 65, 67, 70+
Calculate the standard deviation of the estimate of S (50) using the Nelson-Aalen estimator.
(A) 0.1455
(B) 0.1519
(C) 0.1547
(D) 0.1621
(E) 0.1650

18.9 Initially, 80 lives are included in an observation of survival times following a specific medical
treatment. You are given excerpted information from the study data in the table below.
Exits
Entrants
j t( j ) Deaths at t( j ) (other than death)
in (t( j ) , t( j +1) ]
in (t( j ) , t( j +1) ]
0 20 4
1 0.5 1 2 3
2 1.6 1 6 0
3 1.9 1 8 0
4 2.5 1 10 0
Calculate the Kaplan-Meier estimate of S (2).
(A) 0.931
(B) 0.952
(C) 0.960
(D) 0.969
(E) 0.972

18.10 Initially, 50 lives are included in an observation of survival times following a specific medical
treatment. You are given excerpted information from the study data in the table below.
Exits
Entrants
j t( j ) Deaths at t( j ) (other than death)
in (t( j ) , t( j +1) ]
in (t( j ) , t( j +1) ]
0 4 0
1 0.2 1 2 3
2 1.8 1 5 0
3 1.9 1 0 0
4 2.1 1 7 0
Calculate the Nelson-Aalen estimate of S (2).
(A) 0.910
(B) 0.916
(C) 0.922
(D) 0.928
(E) 0.934

18.11 You are given the following estimated survival properties and risk sets determined using the
Kaplan-Meier method.
j t( j ) rj pˆ j
1 17.2 29 0.9655
2 22.1 27 0.9259
3 32.7 24 0.9583
4 45.0 20 0.9500
Calculate the standard deviation of Sˆ (25) using Greenwood’s formula.

(A) 0.0543
(B) 0.0556
(C) 0.0579
(D) 0.0604
(E) 0.0626

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Fundamentals of Actuarial Mathematics –

Copyright © Society of Actuaries

December 16, 2022 Page 1

(A) More sophisticated policyholders.

Determine the type of contract offered.

December 16, 2022 Page 2

Determine which of the following contracts provides these benefits.

December 16, 2022 Page 3

[Question 3 on the Fall 2012 exam]

December 16, 2022 Page 4

[Question 20 on the Spring 2013 exam]

December 16, 2022 Page 5

December 16, 2022 Page 6

(iv) q40 = 0.003

2.6. You are given the survival function:

[Question 2 on the Spring 2016 exam]

December 16, 2022 Page 7

[Question 2 on the Fall 2016 exam]

(i) For a female, the force of mortality is constant and equals µ

Calculate the probability that a female survives one year.

[Question 3 on the Fall 2016 exam]

December 16, 2022 Page 8

years if there are 10,000 lives age 50 at time 0.

Calculate Var[ L15 ] .

[Question on October 2022 FAM-L Exam]

2.10. You are given:

iii) lx +10 = 400

December 16, 2022 Page 9

2.12. For a new light bulb, you are given:

[Question on October 2022 FAM-L Exam]

December 16, 2022 Page 10

[Question 2 on the Fall 2012 exam]

December 16, 2022 Page 11

(ii) Deaths are uniformly distributed over each year of age

[Question 19 on the Spring 2013 exam]

December 16, 2022 Page 12

x l [ x] l [ x]+1 l x+2 x+2

(ii) Deaths are uniformly distributed over each year of age

[Question 3 on the Fall 2013 exam]

[A modified version of Question 24 on the Fall 2013 exam]

December 16, 2022 Page 13

Calculate 100,000(a − b).

[Question 25 on the Fall 2013 exam]

December 16, 2022 Page 14

x q[ x ] q[ x ]+1 q[ x ]+2 q x +3 x+3

[Question 2 on the Spring 2014 exam]

December 16, 2022 Page 15

x q[ x] q[ x]+1 qx+2 x+2

The force of mortality is constant between integral ages.

[Question 20 on the Fall 2014 exam]

December 16, 2022 Page 16

[A modified version of Question 1 on the Spring 2015 exam]

[A modified version of Question 1 on the Fall 2015 exam]

December 16, 2022 Page 17

[Question 2 on the Fall 2015 exam]

December 16, 2022 Page 18

[Question 1 on the Fall 2016 exam]

December 16, 2022 Page 19

x [ x ]  [ x ]+1  [ x ]+ 2  x+3 x+3

The force of mortality is constant over each year of age.