Title

Is Deferment Period Protection Necessary

Presenter Information

Samuel Guiles

Document Type

Oral Presentation

Location

SURC 202

Start Date

16-5-2013

End Date

16-5-2013

Abstract

Retirement planning is a very important part of every middle-aged person’s life. Deferred whole life insurance and annuity contracts can be purchased by periodic payments during the deferment period and allows the contract holder to buy the protection they need before retirement. Special death benefits are often attached to such contracts which will increase premium rates but also offer the contract holder protection during the deferment period. My project takes a look at premium rates for both basic contracts and contracts that return premium payments with interest if death occurs in the deferment period. I have used male and female mortality tables from the Society of Actuaries website and I have used Microsoft Excel to calculate premium rates and to display the premium calculations. I have also used smoker and non-smoker mortality tables to see how smoking affects premium rates for individuals age: 20-50. My Excel project contains tables and graphs of premium rates for annuity and insurance contracts for males, females, smokers, and non-smokers in the United States. My results have shown that smokers should consider buying deferment protection if they start begin payments during their mid 30s and plan on paying until their mid to late 50s. Smoker mortality rates are noticeably higher around age 45 so smokers should either pay for extra protection or purchase basic contracts with shorter deferment periods. The most efficient option for average citizens is to start payments on a 10- to 20-year deferment contract around the age of 30.

Faculty Mentor(s)

Yvonne Chueh

Additional Mentoring Department

Actuarial Science

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May 16th, 10:30 AM May 16th, 10:50 AM

Is Deferment Period Protection Necessary

SURC 202

Retirement planning is a very important part of every middle-aged person’s life. Deferred whole life insurance and annuity contracts can be purchased by periodic payments during the deferment period and allows the contract holder to buy the protection they need before retirement. Special death benefits are often attached to such contracts which will increase premium rates but also offer the contract holder protection during the deferment period. My project takes a look at premium rates for both basic contracts and contracts that return premium payments with interest if death occurs in the deferment period. I have used male and female mortality tables from the Society of Actuaries website and I have used Microsoft Excel to calculate premium rates and to display the premium calculations. I have also used smoker and non-smoker mortality tables to see how smoking affects premium rates for individuals age: 20-50. My Excel project contains tables and graphs of premium rates for annuity and insurance contracts for males, females, smokers, and non-smokers in the United States. My results have shown that smokers should consider buying deferment protection if they start begin payments during their mid 30s and plan on paying until their mid to late 50s. Smoker mortality rates are noticeably higher around age 45 so smokers should either pay for extra protection or purchase basic contracts with shorter deferment periods. The most efficient option for average citizens is to start payments on a 10- to 20-year deferment contract around the age of 30.