Do we need to compute for the life insurance value using both/either the human life value method and needs analysis? can’t seem to find the specific LOS about this one but it’s fairly presented in appendix of the reading. Thanks in advance
Well, temporary life insurance can be calculated by considering the probability of event that would trigger the payment and the amount of payment, in the period. Plus any necessary costs for company management and profit.
On the other side, the insurance company has to use ALM for manage the portfolio according to institutional objective and constrains.
Permanent one shall be calculated in a similar way. Calculation required on exam because I saw an example.
If the exam asks you to calculate the human life value method, use that. If it asks you to calculate using needs analysis, use that.
I think both methods is fair game in the exam. There are examples of both in the text.