Module Descriptors

Mathematics

MA311: Annuities and Life Assurance (5 ECTS)

This course is the learner's first course in actuarial science. Topics covered include: life table (select and ultimate); probability of survival; payments on survival e.g. annuities, pure endowments; payments on death e.g. life assurance; accumulation with survivorship benefit; net and office premiums; future life time

Taught in Semester(s) 1. Examined in Semester(s) 1.

Workload: 101 hours (24 Lecture hours, 2 Tutorial hours, 75 Self study hours).

Module Learning Outcomes. On successful completion of this module the learner should be able to:

  1. Calculate probabilities of survival and death over different future time periods using ultimate and select mortality. Understand the concept of the force of mortality and know when to apply it rather than the above probabilities. Obtain mathematical relationships between the above functions.
  2. Apply actuarial techniques to value survival benefits including level, increasing, decreasing annuities paid over different periods of life e.g. life, deferred, temporary. (These payments could be paid annually or at other frequencies.) Obtain mathematical relationships between these functions.
  3. Apply actuarial techniques to compute various accumulations with survivorship benefits.
  4. Apply actuarial techniques to value death benefits e.g. whole of life assurance, term/temporary assurance, deferred assurance. (These benefits could be paid at the end of policy year of death or immediately on death.)
  5. Compute net and office premiums and have an awareness of their financial application.
  6. Apply actuarial techniques to obtain mathematical relationships between annuities and life assurances and justify these relationships intuitively.
  7. Apply actuarial techniques to compute retrospective and prospective reserves and show equality mathematically and intuitively.
  8. Apply actuarial techniques to calculate the probability of dying over non-integer ages and to find an expression for the expected value and variance of exact and curtate future lifetime.

Indicative Content

This course introduces annuities and life assurance. The material covered includes:

  1. Life table: probability of survival and death over different future periods of time, force of mortality, interrelation between these different functions.
  2. Survival benefits: pure endowment; annuity due and immediate annuities of the following types: whole life, deferred and temporary and their relationships; accumulation with survivorship benefit.
  3. Death benefits: whole of life assurance; temporary/term assurance; deferred assurance.
  4. Premiums: net and office.
  5. Relationships between annuities and life assurances.
  6. Reserves: retrospective and prospective.
  7. Annuities with different payment frequencies and life assurance benefit paid immediately on death.
  8. Probability of dying over non integer ages, future lifetime
  9. Increasing / decreasing annuities and life assurance sum assured paid immediately on death.

Module Resources

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