1.
Prerequisite. MATHS 321, 351, and a minimum
grade-point-average of 2.5 in all mathematics courses that are to be applied to
the major.
2.
Course Description. Survival distributions, life tables, the
mathematics of life insurance, life annuities, net premiums, and net premium
reserves.
3.
Course Objectives. Students will understand that the present
value of future payments that depend on contingencies is a random variable. They will learn how to combine survival
models with the time value of money to calculate actuarial present values of
life insurance benefits and life annuities.They will be able to calculate net
premiums and net premium reserves for life insurance policies.
4.
Course Rationale. The topics discussed in this course form the
foundation of actuarial science as applied to life insurance. Some topics are also key to other types of
insurance, such as property and casualty.
Therefore, the course is required for the actuarial science major.
The material covered in this course is directly tested on the third of
the professional examinations given by the Society of Actuaries and the
Casualty Actuary Society.
5.
Course Content. Topics will include the future lifetime
random variable, survival functions, the force of mortality, analytical laws of
mortality, various types of life insurance, various types of annuities, net
(benefit) premiums and reserves, and the prospective loss random variable. The variance, as well as the expected value,
of each random variable will bediscussed.
Topics may also include utility functions, simulation of random
variables, recursion relations for reserves, and other insurance topics of
current interest.
6.
Course Format. This course will be taught using lectures
and discussion. Projects will be
assigned, individual and/or group.
Knowledge of spreadsheet computer software will be helpful. Many examples will be presented, including
problems from past actuarial exams.
7.
Methods of Evaluating
Student Performance. Student
evaluation will be based on in-class exams and individual or group
projects. Assessment may also involve
take-home exams, other types of homework, quizzes, and presentations. The evaluation and weight of these
components are at the discretion of the individual instructor.
8.
Evaluation of the Course. The instructor of the course is evaluated by
departmental student evaluations and peer evaluation. The course is reviewed and revised periodically by the Departmental
Undergraduate Programs Committee.
B. Frye, J. Foley, 3/2001