𝟏𝟎 𝐥𝐞𝐬𝐬𝐨𝐧𝐬 𝐥𝐞𝐚𝐫𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐭𝐡𝐞 𝐛𝐨𝐨𝐤 "𝐁𝐞𝐥𝐢𝐞𝐯𝐞 𝐈𝐭 𝐭𝐨 𝐀𝐜𝐡𝐢𝐞𝐯𝐞 𝐈𝐭" by Brian Tracy and Christina Stein is a motivational book that focuses on the power of mindset and belief in achieving goals. Some key lessons from the book include: 1.The Power of Belief: _______ The book emphasizes that your beliefs shape your actions and outcomes. Having a strong belief in your abilities and your goals can drive you towards success. 2.Positive Self-Talk: _____ The authors stress the importance of using positive affirmations and self-talk to overcome self-doubt and build self-confidence. 3. Visualization: ____ The book encourages readers to visualize their goals and desired outcomes. Visualizing success can help in creating a clear mental image of what you want to achieve. 4. Setting Clear Goals: ___ Setting specific, measurable, achievable, relevant, and time-bound (SMART) goals is essential for focused progress and achievement. 5. Perseverance: ______ The book highlights the need to stay persistent in the face of challenges and setbacks. Believing in your goals and maintaining determination can help you push through difficulties. 6. Taking Action: _____ Belief alone isn't enough; taking consistent action towards your goals is crucial. The book emphasizes the importance of continuous effort. 7. Surrounding Yourself with Positivity: _____ Surrounding yourself with supportive and positive influences can help reinforce your beliefs and motivate you to achieve your goals. 8. Mindset Shift: __ The book advocates for shifting from a fixed mindset to a growth mindset, where you believe that your abilities and intelligence can be developed through dedication and hard work. 9. Overcoming Fear: ______ The authors discuss strategies for overcoming fear and doubt, which often hinder progress. Cultivating courage and facing challenges head-on is essential. 10. Learning and Adaptation: ____ Embracing a mindset of learning from failures and adapting your approach can lead to continuous improvement and eventual success. 𝟏𝟎 𝐥𝐞𝐬𝐬𝐨𝐧𝐬 𝐥𝐞𝐚𝐫𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐭𝐡𝐞 𝐛𝐨𝐨𝐤 "𝐁𝐞𝐥𝐢𝐞𝐯𝐞 𝐈𝐭 𝐭𝐨 𝐀𝐜𝐡𝐢𝐞𝐯𝐞 𝐈𝐭" by Brian Tracy and Christina Stein is a motivational book that focuses on the power of mindset and belief in achieving goals. Some key lessons from the book include: 1.The Power of Belief: _______ The book emphasizes that your beliefs shape your actions and outcomes. Having a strong belief in your abilities and your goals can drive you towards success. 2.Positive Self-Talk: _____ The authors stress the importance of using positive affirmations and self-talk to overcome self-doubt and build self-confidence. 3. Visualization: ____ The book encourages readers to visualize their goals and desired outcomes. Visualizing success can help in creating a clear mental image of what you want to achieve. 4. Setting Clear Goals: ___ Setting specific, measurable, achievable, relevant,

1. Copyright © 2008 Pearson Addison-Wesley. All rights reserved.
Calculation of Life
Insurance
Premiums
Chapter 13
Appendix

2. Copyright © 2008 Pearson Addison-Wesley. All rights reserved. 13-2
Premium Calculations in Life
Insurance
• The net single premium (NSP) is defined as
the present value of the future death benefit
• The NSP is based on three assumptions:
– Premiums are paid at the beginning of the policy
year
– Death claims are paid at the end of the policy
year
– The death rate is uniform throughout the year

3. Copyright © 2008 Pearson Addison-Wesley. All rights reserved. 13-3
Calculating the Net Single
Premium for Term Insurance
• For yearly renewable term insurance, the cost of
each year’s insurance is easily determined:


























held
are
funds
period
for
$1
PV
death
of
y
probabilit
insurance
of
amount

4. Copyright © 2008 Pearson Addison-Wesley. All rights reserved. 13-4
Exhibit 13A.1 Commissioners 2001
Standard Ordinary (CSO) Table of Mortality,
Male Lives (selected ages)

5. Copyright © 2008 Pearson Addison-Wesley. All rights reserved. 13-5
Exhibit 13A.2 Present Value of $1
at 5.5% compound interest

6. Copyright © 2008 Pearson Addison-Wesley. All rights reserved. 13-6
Calculating the Net Single
Premium for Term Insurance
• For a five-year term policy, the cost of each
year’s mortality must be computed
separately for each of the five years and
then added together to determine the NSP

7. Copyright © 2008 Pearson Addison-Wesley. All rights reserved. 13-7
Exhibit 13A.3 Calculating the NSP for a
Five-Year Term Insurance Policy, Male,
Age 32

8. Copyright © 2008 Pearson Addison-Wesley. All rights reserved. 13-8
Calculating the Net Single Premium for
Ordinary Life Insurance
• For an ordinary life insurance policy, the cost
of each year’s mortality must be computed
separately for each year to the end of the
mortality table, and then added together to
determine the NSP

9. Copyright © 2008 Pearson Addison-Wesley. All rights reserved. 13-9
Calculating the Net Annual Level
Premium
• The net annual level premium is calculated using
a formula:
• If premiums are paid for life, the premium is called
a whole life annuity due
• If premiums are paid for only a temporary period,
the premium is called a temporary life annuity due
period
paying
-
premium
the
for
$1
of
PVLAD
premium
single
Net
NALP 

10. Copyright © 2008 Pearson Addison-Wesley. All rights reserved. 13-10
Policy Reserves
• Under the level-premium method for paying premiums,
premiums paid during early years are higher than necessary
to pay death claims
– The excess premiums are reflected in the policy reserve
• Policy reserves are a liability item on the insurer’s balance sheet that
must be offset by assets equal to that amount
• The policy reserve is the difference between the PV of future benefits
and the PV of future net premiums
• The policy reserve has two purposes:
– It is a formal recognition of the insurer’s obligation to pay future
claims
– It is a legal test of the insurer’s solvency

11. Copyright © 2008 Pearson Addison-Wesley. All rights reserved. 13-11
Exhibit 13A.4 Prospective Reserve —
Ordinary Life Insurance (1980 CSO
mortality table)

12. Copyright © 2008 Pearson Addison-Wesley. All rights reserved. 13-12
Policy Reserves
• The retrospective reserve represents the net premiums
collected by the insurer for a particular block of policies,
plus interest earnings at an assumed rate, less the
amounts paid out as death claims
• The prospective reserve is the difference between the
present value of future benefits and the present value of
future net premiums
• Both methods will produce the same level of reserves at
the end of any given year under the same actuarial
assumptions

13. Copyright © 2008 Pearson Addison-Wesley. All rights reserved. 13-13
Policy Reserves
• A terminal reserve is the reserve at the end of
any given policy year
• The initial reserve is the reserve at the
beginning of any policy year
• The mean reserve is the average of the terminal
and initial reserves. It is used to indicate the
insurer’s reserve liabilities on its annual
statement

14. Copyright © 2008 Pearson Addison-Wesley. All rights reserved. 13-14
Case Application