Deferred Whole Life EPV Calculator
Calculate the expected present value of a whole life insurance whose death benefit applies only after the deferment period.
Description
Calculate the expected present value of a whole-life death benefit that starts only after a selected number of years.
Deferred Whole Life Insurance EPV helps you calculate the expected present value of a whole-life death benefit that starts only after a selected number of years.
Use the tool to measure how survival through a waiting period changes a simplified whole-life insurance value. It provides a transparent benchmark for actuarial study and rough sensitivity checks under constant annual mortality.
When to use Deferred Whole Life Insurance EPV
Use the tool to measure how survival through a waiting period changes a simplified whole-life insurance value. It provides a transparent benchmark for actuarial study and rough sensitivity checks under constant annual mortality.1
How the calculation works
First value an infinite sequence of end-of-year death payments under constant q. Then multiply that value by the combined survival and discount factor for every deferred year. If q is zero, no death payment can occur and the value is zero.
EPV = B × (vp)^m × vq / (1 − vp) 1Inputs and interpretation
B is the death benefit, m is the whole-number deferment, p = 1 − q, and v = 1 / (1 + i). The infinite series requires vp below one whenever q is positive.
Assumptions and limitations
The closed form assumes mortality and interest stay constant forever. It ignores age variation, selection, policy termination, expenses, premiums, and immediate payment on death, so it should not replace a policy valuation model.
References
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Supplementary Notes for Actuarial Mathematics for Life Contingent Risks — Society of Actuaries