Abstract:
This article discusses premium sufficiency reserve of endowment life insurance for
single insurance participant who are x years old using Lomax distribution. The
parameters in the Lomax distribution were estimated using maximum likelihood estimation
and then determined by a Newton-Raphson iteration method. The calculation
of premium sufficiency reserve is obtained by the gross premium which includes
the administrative costs. The solution of problem is obtained by determining the initial
life annuity, single premium, and annual premium, then the premium sufficiency
reserve formula is obtained based on the distribution of Lomax. The calculation results
of premium sufficiency reserve for endowment life insurance using the Lomax
distribution is larger than prospective reserve for endowment life insurance using
the Lomax distribution.
