Joint-Life Endowment Insurance Premium Calculation Based on Makeham Mortality Law

Inas Aulia Risdiari, Fauziah Nur Fahirah Sudding

Abstract


This research determined life insurance premiums joint-life endowment insurance, that is the insurance that the benefit is paid if one of the insureds dies or all the insureds survive until the end of the contract. This premium calculation uses one of the famous mortality laws, that is Makeham. Makeham mortality law is an updated law of Gompertz's mortality law where the reason that makes Makeham different from Gompertz is the death calculation factor, because Gompertz only takes the cause of death from the age factor. Even though the death factor can also come from accidents, therefore, Makeham combined the two causes of death so that it is corresponded to the actual factors. The Makeham law will function to create the Makeham assumption mortality table with trials and errors method to construct Indonesia Mortality Table 2019 (TMI IV). This construction requires parameters that must be founded to determine the survival probability ( ) of the Makeham. After finding the , calculate the annual premium by dividing the net single premium by the life annuity. The joint-life endowment insurance premium calculation in this study uses 10-year protection with a 5.75% for interest rate and Rp1,000,000,000 for the benefit, and based on the research, the annual premium for this married couple is Rp78,016,785, where the premium calculated based on Makeham will get a higher premium than calculated based on TMI 2019, which gets an annual premium Rp77,410,954.


Keywords


Makeham Law

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References


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DOI: http://dx.doi.org/10.33021/jafrm.v3i1.5190

DOI (PDF): http://dx.doi.org/10.33021/jafrm.v3i1.5190.g1967

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