Term Assurance Details

Introduction

This example of a quotation for a term assurance policy demonstrates the following features:

• the use of occupation as an additional rating factor beyond that typically used for rating term assurance policies
• mortality rates dependent on the sum assured and the occupation code as well as the age, sex and smoker status
• lapse rates dependent on the occupation code and policy year
• the use of goal seeking to determine the premium rate to achieve a discounted profitability of 7.5% of the annualised premium

This example demonstrates how the calculation features of the Prophet Calculation Engine enable more rating factors to be incorporated than would normally be the case for rate book based systems. Also, the use of a profit testing approach using goal seeking enables the insurer to achieve the rate of return that it requires on every policy, irrespective of the rating factors which are used.