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or NSP=NLP PVTLAD
First step : calculate the NSP for a 5-yeat tem life insurance
( previous chapter, slide 58, Table 4)
Second step: Calculate Present Value Temporary Life Annuity Due (PVTLAD)
NOTE: For leveling the term life insurance we must calculate PVTLAD(it is called
temporary because the number is not calculated for the whole life of the
individual).
Third step : calculate NLP using the formula
Second step: The sum of the 70 calculations starting at age 30 and ending at age 99 provides the LAD required for leveling the whole life contract.
LAD= 20.563
Third Step:
NLP=NSP/ LAD
NLP=$209.185/20.563 =$10.172
Leveling the Endowment Life Insurance
For leveling premium for endowment life insurance first you
have to calculate the NSP for endowment life insurance.
Important:
TLAD that is used to level the term life insurance is the same
TLAD required to level the endowment life insurance.
Example: Calculate the level premium for 5-year endowment
life insurance for MR Worth(age30,4%interest rate).
Death
Year Age Probability of surviving Benefit PVF Yearly NSP
5 35 9,491,711/9579,998 1000 0.822 814.352
Plus: NSP death benefit 8.183
NSP for five year
endowment 822.535