This sample premium calculator is part of our software package for life insurance companies currently under development. Knowing the correct premium is crucial for any life insurance company. The valuation principles of modern life insurance mathematics show that the minimum fair premiums depend on the daily yield structure.

Premium calculator

Knowing the correct premium is crucial for any life insurance company. The valuation principles of modern life insurance mathematics show that the minimum fair premiums depend on the daily yield structure.

This sample premium calculator is part of our software package for life insurance companies currently under development.

A traditional life insurance [T], a pure endowment contract [PE] and an endowment [E = T + PE] for a male insurant are considered. The following quantities are calculated:

Technical annual premiums
calculated under a conservative technical rate of interest
Minimum fair annual premium
calculated by the commonly accepted product measure approach, relying on daily interest rate data of the German debt securities market
Present values of the contracts
charging technical premiums instead of minimal fair ones, contracts usually have a positive present value from the viewpoint of the insurer.
Present age of male insurant:
Duration of contract: (value greater 0; integer):
Benefit of T (value greater 0):
Benefit of PE (value greater 0):
Technical interest (value greater 0; 0.035=3.5 %):

The interest rates are updated daily by data from the German Federal Reserve (Deutsche Bundesbank).

More information about the methods used to calculate the premium can be found in this article by our life insurance expert Dr. Tom Fischer.

Contact: info@approximity.com.

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