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Chapter 9: ILPs Calculations - Coggle Diagram
Chapter 9: ILPs Calculations
Bid and Offer
Bid price is always
higher
than offer price
Bid-Offer Pyramid
Bid-Offer spread
For single premium ILP
\(Offer - Bid\over Offer \)
Death Benefit
Types
U + V
Higher of U or V
V
U
U: NAV
V: Chosen death benefit
Allocation Rates
Regular Premium
Percentage of premiums
allocated to buying units
Units will be sold to provide for
assurance charges
or policy fees
Mortality Charges
DB 3
\({q \over {12}} \times v\)
DB 4
at first if \(u < v\)
based on excess of
death cover
over NAV
later if \(u > v\)
0
q usually being in the format of cents per thousand