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calculate the minimum premium an insurance company should charge for a $5 million three-year term life insurance contract

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January 2nd, 2018

Use Table 3.1 to calculate the minimum premium an insurance company should charge for a $5 million three-year term life insurance contract issued to a man aged 60. Assume that the premium is paid at the beginning of each year and death always takes place halfway through a year. The risk- free interest rate is 6% per annum (with semiannual compounding).

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