APPLICATION OF VASICEK™S RATE INTEREST MODEL IN TERM INSURANCE PREMIUMS CALCULATION

Abstract

Factor of interest rate and mortality is former principal components to get premium of term insurance. Vasicek's rate of interest model is one of stochastic rate of interest model that is utilized on derivatif that becomes discount factor of zero coupon bond's price, and solved by Affine's model to get annuity, actuarial value so results annual net premium of term insurance.

Key Word : Vasicek™s rate of interest model