ValueOfAnnuity
[this page | pdf]
Function Description
Returns the approximate value of an annuity payable to a
person of a given age, with possible contingent spouse’s annuity payable on
death of main life. Function caters for guarantee periods and for various
different mortality tables and table variants but uses approximations to cater
for, e.g. different payment frequencies.
A specific input parameter defines choice of annualisation
convention for the input interest rate. If interest rates are annualised
then the appropriate input value for AnnualisationConvention is 1. If
interest rates are continuously compounded then the appropriate input value for
AnnualisationConvention is 0 etc. The function MnRestateYieldOrDiscount
may be used to convert between different annualisation conventions.
PaymentTimingDescription needs to be one of “arrears”,
“advance” or “continuous”. If it is “arrears” or “advance” then payments occur
at the end or the beginning of periods of length 1/PaymentFrequency (in
years). If it is “continuous” then payments are assumed to occur continuously
(and PaymentFrequency needs to be zero).
Currently the Nematrian website supports a range of UK
mortality tables using nomenclature derived from terminology adopted by the
UK’s Continuous Mortality Investigation Bureau. Please speak to your usual
Nematrian contact if you would like this function to calculate annuities using
mortality tables and improvement factors that are not yet supported by the
Nematrian website.
NAVIGATION LINKS
Contents | Prev | Next
Output type / Parameter details
Output type: Double
| Parameter Name | Variable Type | Description |
| MortalityTableName | String | Mortality Table Name (see web page for supported tables) |
| MortalityTableVariant | String | Mortality Table Name Variant (see web page for supported variants) |
| ImprovementUnderpin | Double | Minimum improvement underpin (as a fraction) |
| YearOfUse | Integer | Year of Use for Tables with mortality varying by cohort |
| Age | Integer | Age |
| InterestRate | Double | Interest rate (quoted using AnnualisationConvention) |
| AnnualisationConvention | Integer | Annualisation convention used in quotation of interest rate |
| GuaranteePeriod | Integer | Guarantee period |
| PaymentTimingDescription | String | Payment Timing Description (see web page for meaning) |
| PaymentFrequency | Double | Payment Frequency |
| SpousePercentage | Double | Percentage paid to spouse on first life death |
| SpouseAgeDifference | Double | Age difference between first life and spouse |
Links to:
-
Interactively run function
-
Interactive instructions
-
Example calculation
-
Output type / Parameter details
-
Illustrative spreadsheet
-
Other Life insurance functions
-
Computation units used
Note: If you use any Nematrian web service either programmatically or interactively then you will be deemed to have agreed to the Nematrian website License Agreement