SOA ILA LPMIndividual Life & Annuities — Life Product Management

A 10-year term product shows PV(profits) = 1.2M and PV(premiums) = 24M at the hurdle rate. The profit margin is:

Full credibility for a mortality study is set at 1,082 deaths (90% confidence, ±5%). A block records 400 deaths. Under the square-root rule, Z is closest to:

Which statement about YRT reinsurance versus coinsurance on a new UL product is TRUE?

Raising credited rates on a deferred annuity block in a rising-rate environment is primarily intended to:

Your company proposes an indexed UL with a 10% cap and 100% participation on an S&P 500 point-to-point strategy, priced at an option budget of 4.5%. Rates fall 150 bp after pricing. (a) Explain how the option budget is funded and why it changes. (b) Recommend and justify two product actions. (c) Describe the illustration constraint that limits the response.

A company's fully-underwritten term mortality is 88% of the industry table (A/E) on 400 deaths; its new accelerated-underwriting programme shows 105% A/E on 60 deaths. Recommend a best-estimate mortality assumption for each programme and explain the credibility approach, the expected slippage rationale and how you would monitor.

A closed block of universal life is losing money because realised mortality is 115% of pricing. Management asks for a COI increase. Evaluate the proposal, listing the analyses, constraints and alternatives you would present.

A whole life policy has a death benefit of 100,000 and a reserve of 30,000 at the end of year 10. Calculate the net amount at risk for year 11's mortality charge (ignoring interest for the year).

Explain why a life insurer's exposure to mortality/longevity risk differs between a term life block and a payout (income) annuity block, and describe one product design feature that mitigates longevity risk on the annuity side.