This course focuses on the types and pricing of life insurance and life annuity contracts and covers some of the material in exams MLC and 3L. Topics include: Modeling decrements used in insurances and annuities using single, joint, marginal, and conditional probabilities; discrete time and continuous time Markov chain model; computing present value and accumulated values using non-stochastic interest rate; modeling cash flows of traditional life insurances and annuities using Markov chain model; benefit reserves for traditional life insurances and annuities using Markov chain model, modeling cash flow for non-interest sensitive insurances; modeling contract cash flow for basic universal life insurances; modeling cash flow for basic universal life insurances; benefit reserves for basic universal life insurances; and models that consider expense cash flows.
Prerequisite
MA 261 Linear Algebra and
MA 331 Probability & Statistics I