DETERMINATION OF THE LAST SURVIVOR ANNUAL PREMIUM FOR MULTIPLE LIFE INSURANCE POLICY BASED ON MAKEHAM’S LAW OF MORTALITY

Abstract

Every human being must have hopes and goals. But, even with the best of plans and the most sincere intentions, things to do not always turn out as expected. This uncertainty causes risk. That risk can evoke the damages. Things that can be done to minimize these damage is by following life insurance. Life insurance is divided into two types, namely single life insurance and multiple life insurance. Multiple life insurance is an insurance where the insurer will provide protection to two or more insured person. In multiple life insurance, there are two terms namely joint life status and last survivor status. The last survivor status is failed if all the insured dies. Someone who follows the last survivor insurances must pay a premium in accordance with the policy contract. The premiums paid each year are called annual premium. Annual premium calculation can be done using the commutation function and Makeham mortality law. The calculation of the annual premium value for last survivor insurance based on the law of Makeham mortality is greater than without mortality law. Keywords : Life insurance, last survivor insurance, annual premium, Makeham’s law of mortality.