Calculation of Term Life Insurance Premium Reserves with Fackler Method and Canadian Method

Khalilah Razanah Zakirah, Betty Subartini, Riaman Riaman

Abstract


Every individual around the world goes through the life cycle of birth and continues their journey with unique experiences. The uncertainty of the future, which includes both happiness and calamity, is a universal aspect of human life. Life risks, such as illness and death, are an unavoidable reality for every individual in this world. Life insurance is one of the solutions to manage these risks, with term life insurance being one of the options. The focus of this research lies on term life insurance, with the aim of calculating premium reserves using the Fackler and Canadian methods. This research is concerned with the process of calculating premium reserves, and the results show that the Fackler method produces a larger premium reserve value compared to the Canadian method. Recommendations are given to companies to use the Fackler Method in calculating term life insurance premium reserves to avoid potential losses that could occur if using the Canadian method. The choice of premium calculation method is a strategic key in effective risk management for the company.


Keywords


life insurance, term life insurance, premium reserve, Fackler method, Canadian method.

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References


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DOI: https://doi.org/10.46336/ijqrm.v5i1.589

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Copyright (c) 2024 Khalilah Razanah Zakirah, Betty Subartini, Riaman Riaman

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IJQRM: Jalan Riung Ampuh No. 3, Riung Bandung, Kota Bandung 40295, Jawa Barat, Indonesia

 

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