Abstract
Professor Belth is, uncomfortably for the actuarial profession, close to the truth in pointing to an absence of specific published analyses of the impact of lapse rates on prices.1 The only mild rebuttal that I can offer without going rather far into the past is to draw attention to a discussion of the subject by Neil W. Macintyre, F.S.A.2 Mr. Macintyre's is particularly of interest because it recognizes the existence of two different premises upon which calculations of the cost of lapsation may be based. These two are labeled by Mr. Macintyre the average cost approach and the marginal cost approach, respectively. Professor Belth uses only the first of these. The aim of this communication is to suggest several ways in which Professor Belth might, if he wishes, write a sequel to his present paper which would in my opinion throw considerably clearer light upon the subject than he thus far has succeeded in doing. My suggestions are as follows:
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