A model to design a term life assurance product for sportsmen and women upon diagnosis of critical illness and death

Abstract

This product’s main objective is to design a cheap and affordable conventional term life assurance product that pays professional sportsmen and women or their living dependents on death or upon diagnosis of a critical illness at an attractive Sum assured and good profit margin of above 5%. Profit testing technique was used as various actuarial computations were carried out to determine the profit margin for different ages. Key assumptions made include; the interest rate on in reserves, Ugandan mortality, risk discount rate, the minimum term, radix and expenses (including management charges and commission charges.) From the above, Microsoft excel and python were used to calculate the premium level at the required profit margin for the policyholder depending on age, term of contract and gender. The product is further used to carryout sensitivity analysis to determine the main factors that may affect the product. Recommendations and conclusions are also provided in chapter 5 of this document