Policy Value Table

Regardless of type of benefit, any payment to the policyholder can be expressed as a percentage of Face Amount.

For example, the insurance contract will pay 100% of Face Amount to the policyholder upon death, 20% of Face Amount to the policyholder upon surrender at policy year 3, 5% of Face Amount as a coupon to the policyholder upon survival at policy year 6.

Hence, the "Percentage of Face Amount" information for each benefit type can be summarized in a table called "Policy Value Table".

An example of Policy Value Table:

Note that the number of unit shown above is 1,000. Hence a "1,000" on death benefit represents a 100% (1,000/1,000) payment on Face Amount.

In formula:

\[BEN\_PP _t = FA × POL\_VAL _{Type, t} \]

Using the same decrement model we used before, let's calculate the benefit payment again.

Year 1

DTH_OUTGO = FA * POL_VAL_TBL(DB, t) * NO_DEATHS = 500 * 0.000174 = 0.09

SURR_OUTGO = FA * POL_VAL_TBL(GCV, t) * NO_SURRS = 50 * 0.099991 = 5.00

COU_OUTGO = FA * POL_VAL_TBL(COU, t) * NOP_IFSM = 0 * 1 = 0

MAT_OUTGO = FA * POL_VAL_TBL(MAT, t) *  NOP_IF = 0 * 0.899835 = 0

Year 2

DTH_OUTGO = FA * POL_VAL_TBL(DB, t) * NO_DEATHS = 500 * 0.000312 = 0.16

SURR_OUTGO = FA * POL_VAL_TBL(GCV, t) * NO_SURRS = 100 * 0.044984 = 4.50

COU_OUTGO = FA * POL_VAL_TBL(COU, t) * NOP_IFSM = 0 * 0.899835 = 0

MAT_OUTGO = FA * POL_VAL_TBL(MAT, t) * NOP_IF = 0 * 0.854540 = 0

...

Year 10

DTH_OUTGO = FA * POL_VAL_TBL(DB, t) * NO_DEATHS = 500 * 0.000492 = 0.25

SURR_OUTGO = FA * POL_VAL_TBL(GCV, t) * NO_SURRS = 500 * 0.007850 = 3.92

COU_OUTGO = FA * POL_VAL_TBL(COU, t) * NOP_IFSM = 25 * 0.785212 = 19.63

MAT_OUTGO = FA * POL_VAL_TBL(MAT, t) * NOP_IF = 500 * 0.776870 = 388.43

A demonstration spreadsheet showing the calculation above can be downloaded here:
https://drive.google.com/file/d/0B4OirwHLcmE1UkZ2U0Q0ODI0MGs/view?usp=sharing