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Analysis of the Variable Life Insurance Based on Log-Normal Distribution
International Journal of Statistical Distributions and Applications
Volume 1, Issue 1, September 2015, Pages: 5-11
Received: Aug. 20, 2015; Accepted: Aug. 28, 2015; Published: Sep. 2, 2015
Authors
Shiqi Dong, Central China Normal University, the Institute of Mathematical and Statistics, Wu Han, China
Shan Pang, Central China Normal University, the Institute of Mathematical and Statistics, Wu Han, China
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Abstract
Fixed rate, premiums and insurance coverage for policyholders and insurance companies in traditional life insurance have increased certain risks. For this reason, we consider studying variable life insurance. The biggest difference between the two insurance is that whether the actual death benefit of volatility is changeable. This paper studied the change of the premium when the premium changes in proportion to the death benefit and when it is fixed. And, it put forward a way to pay the death benefit, named “pay off increasing amount insurance”. Finally, this paper simulated the mean and variance of the death benefit using Monte Carlo method, and also compared the advantage and disadvantages of each approach.
Keywords
Variable Life Insurance, The Actual Death Benefit, Change in Proportion, Fixed Premium, Pay off Increasing Amount Insurance, Monte Carlo Method
Shiqi Dong, Shan Pang, Analysis of the Variable Life Insurance Based on Log-Normal Distribution, International Journal of Statistical Distributions and Applications. Vol. 1, No. 1, 2015, pp. 5-11. doi: 10.11648/j.ijsd.20150101.12
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