Endowment Insurance EPV Calculator
Calculate the expected present value of an endowment insurance paying on death during the term or on survival to maturity.
Description
Calculate the expected present value of a simplified endowment insurance paying on death during the term or on survival to maturity.
Endowment Insurance EPV helps you calculate the expected present value of a simplified endowment insurance paying on death during the term or on survival to maturity.
This tool combines term-insurance protection and a pure-endowment survival benefit in one transparent calculation. It is useful for learning, reconciliation, and preliminary sensitivity analysis under level annual assumptions.
When to use Endowment Insurance EPV
This tool combines term-insurance protection and a pure-endowment survival benefit in one transparent calculation. It is useful for learning, reconciliation, and preliminary sensitivity analysis under level annual assumptions.1
How the calculation works
The death component sums discounted end-of-year benefits over the term. The survival component pays the same benefit at maturity if the insured survives every year. Since the events are mutually exclusive, their expected present values are added.2
EPV = B × {vq[1 − (vp)^n]/[1 − vp] + (vp)^n} 1Inputs and interpretation
Enter a constant annual death probability q, annual effective interest i, term n, and benefit B. The calculation sets p = 1 − q and v = 1 / (1 + i).
Limitations and assumptions
The model omits expenses, premiums, surrender, profit participation, changing mortality, and subannual timing. It assumes the death and maturity benefits are equal and paid at policy-year boundaries.
References
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Supplementary Notes for Actuarial Mathematics for Life Contingent Risks — Society of Actuaries
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Actuarial present value — Wikipedia contributors
Similar or alternative tools
- Term Insurance EPV Calculator
Calculate the expected present value of an n-year term life insurance paying at the end of the year of death within the term.
- Continuous Whole Life EPV Calculator
Calculate the expected present value of a continuously paying whole life insurance under a constant force of mortality derived from the annual death probability.
- Pure Endowment EPV Calculator
Calculate the expected present value of a pure endowment paying only if the life survives the full term.