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Zeroized reserves for a discrete death-benefit contract

V_zeroized.Rd

Computes reserves backward by setting expected profit in each policy year equal to zero. Negative reserves may optionally be floored at zero.

Usage

V_zeroized(qx, i, G, benefit, r = 0, e = 0, V_terminal = 0, floor_zero = TRUE)

Arguments

qx

Mortality probability by policy year.

i

Annual effective interest rate by policy year. Values must be greater than -1.

G

Gross premium by policy year.

benefit

Death benefit by policy year.

r

Percent-of-premium expense rate by policy year. Values must lie in [0, 1].

e

Fixed expense by policy year.

V_terminal

Nonnegative scalar terminal reserve.

floor_zero

Logical scalar. If TRUE, negative reserves are replaced by zero.

Value

A named numeric vector of length length(qx) + 1.

Examples

V_zeroized(
  qx = c(0.015, 0.017, 0.019, 0.021, 0.024),
  i = 0.06,
  G = 19279,
  benefit = 1000000,
  e = 240
)
#>       V0       V1       V2       V3       V4       V5 
#>    0.000    0.000 2679.540 4099.544 3602.509    0.000