A Co-Ordinated System of Calculations for Altered Policies

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SynopsisThis paper describes a practical co-ordinated system of calculating financial terms for policy alterations and calculating surrender and paid-up values of policies which have been altered. The system is primarily designed to produce numerical results which are consistent, equitable and capable of evaluation without the need for special actuarial experience. The calculation formulae make use of the tabular rates of surrender values and paid-up values currently granted for unaltered policies and the current premium rates charged for new policies; the often difficult selection of suitable actuarial functions is thereby avoided automatically without departing from general actuarial principles. Since the actuarial bases inherent in these tabular rates are not used explicitly the rates can be changed independently at any time without affecting the use of the formulae. The system is equally suitable for operation by clerical staff or for computer application and should produce economies in the valuable time of skilled staff.At the end of the paper, examples are given comparing results with those calculated by conventional methods.