Department of Finance
Journal of Actuarial Practice (1993–2006)
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Date of this Version
1993
Document Type
Article
Citation
Journal of Actuarial Practice 1 (1993), pp. 141-151
Abstract
This paper discusses several practical applications of recursive formulas:
a) Traditional whole life-As an introduction, the well-known relationship between successive terminal reserves is reviewed. Recursive formulas are developed to calculate the reserves and the premiums;
b) Universal life-Recursive formulas are used both for the calculation of target premiums and reserves. Consideration is given to the TEFRA corridor;
c) Paid-up rider-A participating single premium rider that provides a level death benefit can be devised using an inherent one year term benefit. Recursive functions are used to determine the premium that precisely matures the rider.
Because the APL programming language is particularly amenable to recursive formulas, a few sample APL programs are provided.
Included in
Accounting Commons, Business Administration, Management, and Operations Commons, Corporate Finance Commons, Finance and Financial Management Commons, Insurance Commons, Management Sciences and Quantitative Methods Commons
Comments
Copyright 1993 Absalom Press