Fractional Premium
Calculates the annualized value of the fractional premiums.
PremiumFrac(px1, x, m, k, i = 0.04, data, prop = 1, effect = "yes", assumption)
px1: A numeric type value. The value of the single net premium.x: An integer. The age of the insuree.m: An integer. Years of premium payment.k: An integer. Number of premiums per year.i: The interest rate. A numeric type value.data: A data.frame of the mortality table, with the first column being the age and the second one the probability of death.prop: A numeric value. It represents the proportion of the mortality table used (between 0 and 1).effect: A character string. This parameter indicates if, in the event of death, the insuree is released from paying the remaining fractional premiums of that year ("yes" or "no")assumption: A character string. The assumption used for fractional ages ("UDD" for uniform distribution of deaths and "constant" for constant force of mortality).Returns the annualized value of the fractional premium.
If k=1, regardless of the "effect", the returned value is the annual premium.
PremiumFrac(1000,20,10,2,0.04,CSO80MANB,1,"yes","constant") PremiumFrac(1000,20,10,2,0.04,CSO80MANB,1,"no","UDD")
Chapter 4 of Actuarial Mathematics for Life Contingent Risks (2009) by Dickson, Hardy and Waters
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