Premium Calculator - Whole Life Policies
ClariNet LS can generate premium schedules for Whole Life policies and can price these policies.
Data Points
- Policy
In the Policy entity, there are 3 relevant data points:
Policy Type: this will be set to Whole Life.
Participating: currently ignored.
Dividend Option: currently ignored.
The data points are shown here:
- Premium Calculator Parameters
This parameter in the Premium Calculator Parameters how much of the dividend is used to offset premium payments.
Optimization
When a new premium schedule is created, for a whole life policy there are 3 options:
- Use Premium Calculator: see below;
- Enter Values Manually: this allows manual input of premiums (e.g. if they have been calculated separately);
- Use Illustrated: the amount entered in the illustration is applied directly as a premium.
For the premium calculator option, ClariNet LS will take the premium from the illustration and will subtract the dividend multiplied by the multiplier specified in the premium calculator to compute a net premium. For example, if our illustration looks like this:
And we have a dividend multiplier of 75%, our premium calculator will show this:
