Abstract
Insurance offers numerous advantages in managing the diverse dangers it encounters. The level of compensation provided is contingent upon the magnitude of the premium remitted. A fraction of the premium collected by the company must be allocated as a premium reserve to ensure that the company will not have any challenges in settling future claims. The calculation of premium reserves is performed through the utilization of prospective and retrospective reserve methods, which rely on net premiums as the foundation for the computation. The premium reserve calculation approach employs both the Canadian and Full Preliminary Term methodologies. The objective of this study is to calculate the premium reserves for a dual-purpose life insurance policy using both the Canadian approach and the Full Preliminary Term technique. The policyholder in question is a participant at an insurance company. This study utilizes the 2011 Indonesian Mortality Table (TMI) to calculate premium reserves. The process involves determining the annuity value, net annual premium, adjusting the annual premium using the Canadian method, and calculating the premium reserves at the end of year t for dual-purpose life insurance. Calculations with different interest rates demonstrate that the value of the premium reserve will decrease as the interest rate employed increases.
Recommended Citation
Fatimah, Farisa Salwa; ferezagia, debrina; and Darmiza, Wira
(2024)
"THE EXAMINATION OF THE MATHEMATICAL CALCULATION ON PREMIUM RESERVE MODIFICATIONS FOR ENDOWMENT-LIFE INSURANCE PRODUCTS,"
Jurnal Administrasi Bisnis Terapan: Vol. 6:
Iss.
2, Article 4.
DOI: 10.7454/jabt.v6i2.1108
Available at:
https://scholarhub.ui.ac.id/jabt/vol6/iss2/4
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