Reply To: Interview ques of CT5

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March 29, 2019 at 7:57 pm #24560
nancydhingra
Participant

    For an example,

    Suppose the policyholder dies in first year of payment. If he has bought annuity due, insurer must have paid him once. But if he has bought annuity arrear, insurer won’t have to pay anything at the end of the year.

    You can see it through the formula of whole life annuity too.

    ax=äx-1

    This implies PV of due annuity is always greater than arrear

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