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Calculating Actuarial Present Value of simple whole-life insurance

version 1.0.0.0 (1.55 KB) by Arief Anbiya
The function plots the survival probabilities and calculates the corresponding APV

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Updated 02 May 2017

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Regards. I would like to share my first file exchange here.
In an insurance product, a company has a risk to deliver a certain amount of benefit to the insured at each time interval (for discrete case). Actuarial Present Value is the expected value of the present value of this future liability. For example, if the insured is now age 20, and the benefit is agreed for 10,000,000IDR, then the APV is the amount of money that the company should prepared from the current time for future liability. High survival probabilities of the insured would cause small APV, which means the money that the company has to prepare at issue time is small (no rush for quick investment).
This function accepts 3 inputs : insured age, the sum assured (benefit), and the interest rate. The probabilities are modelled by generating normally distributed random numbers to create the mortality table. The number of lives for newborn is 1000. After the model is prepared, we plot the probabilities and calculate the APV of the whole-life insurance. If we put the int_rate=0, which means no interest rate, then the APV will be the same as the SA or the benefit, since there is no interest for investment in that APV.
The model and calculation is quite basic.
Thanks. Hope this will be useful.

Cite As

Arief Anbiya (2020). Calculating Actuarial Present Value of simple whole-life insurance (https://www.mathworks.com/matlabcentral/fileexchange/62580-calculating-actuarial-present-value-of-simple-whole-life-insurance), MATLAB Central File Exchange. Retrieved .

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MATLAB Release Compatibility
Created with R2017a
Compatible with any release
Platform Compatibility
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