NUMERICAL SOLUTIONS FOR IC33

1. Date of birth Calculations.

Eg: Calculate age last , next and age nearer birthday DOC 10 Oct 2002 ; DOB 05 Apr 1962 Step 1 : Take the DOC first and subtract it with DOB . Days months Yrs 10 -- 10 2002 Ans : Last - 40 05 04-- 1962 Next - 41 ----------------------------Nearer - 41 05 -- 06 -40 -----------------------------Step 2 : The number indicated in the year column will be the age last Bday. Step 3 : Add 1 to the age last Bday to give you the age next Bday. Step 4: When the months column shows 6 or more than 6 ; the age nearer Bday will be same as the age next bday. In case the months column shows 5 or less than 5 then the age nearer bday will be same as age last bday. Eg: Calculate age last , next & nearer Bday. DOC 14 July 2003 ; DOB 08 Sept 1964. 14 - 07 - 2003 Ans : Last - 38 08 - 09 - 1964 Next - 39 -----------------------Nearer- 39 2 - 10 38 ---------------------------Step 1: When carry forward has to be done from the year to the month , first change the year from 2003 to 2002 and the take 12 forward and add to 07 ( indicated in months column ) the new figure in the columns become 12 + 07 = 19 09 = 10 & in the year column it becomes 2002 1964 = 38. Eg : Calculate age last , next & nearer Bday DOC : 20 July 2003 ; DOB : 25 Sept 1992. 20 -- 07 -- 2003 Ans : Last : 10 25 -- 09 -- 1992 Next : 11 ---------------------------Nearer : 11 25 -- 09 -- 10 --------------------------Step 1 : When carry forward has to be done from months to days

first make 07 to 06 and carry forward 30 and add to 20 ( indicated in the days column ) so the days column becomes 50 25 = 25 . Step 2 : Now the month column has become 06 ( since 30 days have been carry forwarded to days ) We carry forward 12 from the years column and add to 06 months i.e 12 + 6=18 09 = 09 . Step 3 : The year column shows 2002 ( 12 has been carry forwarded to months in step 2 ) Hence 2002 1992 = 10. POINTS TO BE NOTED : 1. The first step is subtracting the days column , then the months and finally the year. 2. Please strike the months/ years when you carry forward ,makes it easy for remembering the new figure. 3. If the months column ( after subtracting) shows 1, 2, 3 , 4, 5 , then the age nearer bday will be same as age last bday. 4. If the months column ( after subtracting) shows 6, 7, 8, 9, 10 , 11) the age nearer bday will be same as age next bday.

2. PREMIUM CALCULATION Step 1 : Take the Tabular Premium ( TP) Step 2 : To the answer of step 2 subtract the high SA rebate given Step 3 : Give Modal Rebate / Extra to Step 2 Step 4 : Add any riders extra to the answer of Step 3. Step 5 : Take the answer of step 4 multiply with SA and divide it by 1000. (Step 4 answer * SA ) / 1000. Step 6 : With the mode asked for answer of step 5 to be divided by 1( yrly ) 2 (Half) 4 ( qtrly ) or 12 ( monthly). Eg : Calculate the yearly premium . SA Rs 100000 , Mode yearly, Term 20 yrs endowment , High SA rebate of Rs 2 per thousand of TP. Accidental Death Benefit Rs 1.50 extra . Tabular Premium ( TP ) Rs 32.34. Mode adjustment for yearly mode Rs 1. 50 rebate Step 1 : Take the TP i.e 32.34 Step 2 : Give High SA rebate 32.34 2 = 30.34

Step 3 : Give Modal rebate 30.84 1.50 = 28.34 Step 4: Add the riders ( Accidental benefit ) 28.84 + 1.50 = 30.34 Step 5 : 30.34 * 100000 ( SA ) / 1000 = 3034 Step 6 : For yearly mode divide by 1 i.e 3034 / 1 = 3034 ( Ans ) E.g : Calculate Half yearly premium for SA Rs 1 Lac , Term 35 Yrs ; DOB 28 6-1974 ; Date of Maturity 20 12 2037 TP for age 27 : 27.46 ; For age 28 : 27.83 ; For age 29 : 28.37 ; Mode rebate for half year is Re 1 ; SA rebate for 50000 and above is Rs 1.50. Step 1 : Take date of Maturity and subtract it with term to get DOC . ( 20 12- 2037) 35( Term)= 20-12-2002 Step 2 : DOC DOB will give you the age which the TP has to be picked from . 20 12 - 2002 28 6 - 1974 Age nearer : 28 ----------------------22 05 - 28 -----------------------Step 3 : Take the TP for age 28 i.e 27.83 Step 4 : Give High SA rebate for half year 27.83 1.50 = 26.33 Step 5 : Give High SA Rebate 26.33 1 = 25.33 Step 6 : No extra given for riders so (25.33 * 100000(SA)) / 1000 = 2533 Step 7 : For half year mode divide it by 2 2533 / 2 = 1266.50 ( Ans) E.g : Calculate monthly premium SA Rs 100000, Term 20 yrs endowment ; TP is Rs 26.42 ;High SA rebate Rs 2 of T.P; accidental benefit Re 1extra ; Health extra Rs 2 ; Mode adjustment 5% extra for monthly mode . Step 1 : Take TP i.e 26.42 Step 2 : High SA rebate = 26.42-2=24.42 Step 3 : Modal Extra = 24.42*5%=1.221 Step 4 : Modal Extra= 24.42+1.221=25.64 Step 5 : Add the riders ( Accidental Benefit & Health Extra) 25.641 + 1 +2 = 28.641

Step 6 : (28.641 * 100000) / 1000 = 2864 Step 7 : for monthly mode divide by 12 2864 / 12 = 238.6 ( Ans ) POINTS TO NOTE : When the question asked for rounding to the nearest Re that time use .50 as mid reference point i.e if the answer is 234.46 then round it to 234 . If the answer is 3244.73 then round it to 3245. 3. PAID UP VALUE(PUV) , SURRENDER VALUE(SV) & LOAN Step 1 : PUV = ( NUMBER OF PREMIUM PAID* SA / NO OF PREMIUMS FOR THE TERM ) + BONUS. Step 2 : SV = PUV * SV FACTOR Step 3 : GSV = 30 % OF ALL PREMIUM PAID 1ST YEAR PREMIUM. Step 4 : LOAN = SV * 90%. E.g Calculate PUV , SA Rs 32000 Plan & term : Endowment 20 yrs DOC : 1-09-1997 ; Date of last unpaid premium 01 sept 2009. Mode yearly. Step 1 : First find the No. of premiums paid i.e FUP( First unpaid premium) DOC 01 09 2009 01 - 09 1997 --------------------12 ----------------------Step 2 : PUV = (12 * 32000) / 20 = 19200 ( Answer ) Eg. Calculate PUV .SA 200000 Mode qtrly ; Term 20 yrs ; Date of last premium paid 01-04-2003 ; DOC 1-1-1995; bonus vested 20000. Step 1 : When last premium paid is given , then you have to take the next immediate date where in the premium has to be paid as your FUP Hence the FUP here is 1-7-2003. Step 2 : No of premium paid = 1-7-2003 1.1- 1995 --------------6- 08 ---------------

Step 3 : When you get 3/6/9 in the months column in qtrly mode , you could make it as 0.25 (3 months) , 0.50 ( 6 months ) , 0.75 ( 9 months) . Same can be used in half year mode also Step 4 : PUV = (8.5 * 200000/20) + 20000 ( Bonus ) = 105000 (Ans) Eg : Calculate Loan as on 20 Dec 2006 SA 100000 , Plan & Term Endowment 25 Yrs ; Mode Half year Last unpaid premium 10-4-2006 ; DOC 10-10-1995 SV Factor for 11 yrs : 63% ; for 12 yrs : 64% ; for 10 Yrs: 62%. Loan upto 90% of SV . Step 1 : No. Of premiums paid = FUP DOC 10-04-2006 10-10-1995 ------------------06 10 -------------------Step 2 : PUV = (10.5 * 100000) / 25 = 42000 Step 3 : To take the SV factor , take the date for the loan asked and subtract it with DOC . 20 12- 2006 10-10- 1995 -------------------10 -2 - 11 --------------------The figure which comes in the year column has to be taken as the year for SV factor . Step 4 : SV = PUV * SV FACTOR = 42000 * 63% = 26460 Step 5 : Loan = SV * 90% = 26460 * 90% = 23814 (Ans ) POINTS TO NOTE : 1. The term last premium unpaid or last premium paid due means the same date has to be taken as FUP. 2. In case its mentioned as Last premium paid then the immediate next paying date has to be taken as FUP .

4 . CLAIMS Step 1 : Claims = (SA + VESTED BONUS)- No. of unpaid Premiums. POINTS TO NOTE 1. First add all the vested bonus plus the interim bonus if any and add it to the SA. 2. For finding the No of unpaid premium , write down all the premiums dates which fall from the policy anniversary year to the next policy year . then strike out which have been paid , the balance ones , add all the premiums , that will give you the No of unpaid premiums . E.g : Calculate the Death claim admitted on 15 Oct 2006. SA Rs 200000 , Term & Plan : 20 Yrs Endow. Premium Rs 1000/= PER QTR. Mode Qtrly . Bonus vested till date is 600 per thousand of SA . Interim bonus declared of Rs 30 per thousand of SA on 31st Mar 2006 till 31st Mar 2007. DOC 03 01- 1992 ; Last premium paid on 03 4 2006 Step 1 : Bonus =600 * 200000/ 1000 = 120000 Interim Bonus = 30 * 200000/ 1000= 6000 Step 2 : Add the bonus + interim bonus + SA 120000 + 6000 + 200000 = 326000 Step 3 : First note the dates for the entire policy year of 2006 where the premiums have to be paid 1st : 03- 01- 2006 2nd : 03 04- 2006 3rd : 03- 07- 2006 4th : 03 10 - 2006 Step 4 : As per the problem 1st & 2nd have been paid . That means 3rd & 4th has still to be paid . So add the premiums i.e 1000 + 1000 = 2000 Step 5 : Claim = (326000 2000) = 324000 (Ans )