1

A Field Guide to Some formulas

Crucial formulas:
Probabilities:
p
x
=
1
p
x
t
p
x
= Pr[(x) lives to age x + t]
= p
x
p
x+1
. . . p
x+t
=
l
x+t
l
x
t
q
x
= Pr[(x) dies between ages x and x + t]
= 1
t
p
x
t|u
q
x
= Pr[(x) dies between ages x + u and x + t + u]
=
u
p
x

t+u
p
x
=
l
x
l
x+t
l
x
(|u defers any eect u years)
t
p
x
q
x+t
=
l
x+t
l
x+t+1
l
x
=
t
p
x

t+1
p
x
=
1|u
q
x
=
|u
q
x
=
1
d
ln

Sd + P e
P e Id

Pr(L
g
0
0) =
[]
p
x
, [ ] = greatest integer function
2
Discrete
t
E
x
=
t
p
x

t
A
1
x:n|
=
n1

t=0
t
p
x
q
x+t

t+1
A
1 (m)
x:n|
=
mn1

t=0
t/m
p
x 1/m
q
x+t/m

t/m+1
A
(m)
x
= A
1 (m)
x:|
A
x:n|
= A
1
x:n|
+
n
E
x
a
x:n|
=
n1

t=0
t
p
x

t
a
(m)
x:n|
=
1
m
nm1

t=0
t/m
p
x

t/m
a
x
=

t=0
t
p
x

t
a
x:n|
=
n

t=1
t
p
x

t
= a
x:n|
1 +
n
E
x
e
x
=

k=1
k
p
x
E(K
x
) = e
x
E(K
2
x
) = 2

k=1
k(
k
p
x
) e
x
e
x:n|
=
n

t=1
t
p
x
= a
x:n|
with = 1 (i = 0)
P =
A
x
a
x
P
(m)
=
A
x
a
(m)
x
Note: This needs to be divided by m to give the mthly payment.
L
g
0
= (S +
P e
d
)v
kx+1
+ I
P e
d
I = initial expense, e = recurring expense
3
Continuous:
S(x) = S
0
(x)
=
x
p
0
S
x
(t) =
t
p
x
=
S(x + t)
S(x)
f
x
(t) =

t
l
x+t
l
x
=

t
S
x
(t)
=
t
p
x

x+t
A
1
x:n|
=

n
0

t
t
p
x

x+t
dt
=

n
0

t
f
x
(t) dt
A
x
= A
1
x:|
A
x:n|
= A
1
x:n|
+
n
E
x

e
x
=

0
t
p
x
dt
E(T
x
) =

e
x
E(T
2
x
) = 2

0
t
t
p
x
dt
a
x:n|
=

n
0
t
p
x

t
dt
a
x
= a
x:|

e
x:n|
= a
x:n|
with = 1 (i = 0)
4
De Moivre, also called uniform:
l
x
= x
A
1
x:n|
=
1 e
n
( x)
A
x
= A
1
x:x|
A
1
x:n|
=

i
A
1
x:n|
Exponential, also called constant force of mortality
S(x) = e
x
t
p
x
= e
t
A
1
x:n|
=

+

1 e
(+)n

A
x
=

+
a
x:n|
=
1
A
1
x:n|
=
1
+

1 e
(+)n

(1)
5
Below is a summary of some formulas and their range of validity,
when suitably modied. In particular discrete formulas use d = i/(1+
i) instead of = ln(1 + i). Things payable mthly (m) will use d
(m)
and i
(m)
instead of d and i. C means continuous, D means
discrete, and WL means whole life.
6
Table 1: Life Table Formulas
Formula Valid
l
x+t
= (1 t)l
x
+ tl
x+1
UDD, 0 t 1
t
q
x
= t(q
x
) UDD, 0 t 1
l
x+t
= (l
x
)
(1t)
(l
x+1
)
t
CFM, 0 t 1
t
p
x
= (p
x
)
t
CFM, 0 t 1

x+t
=
qx
1t(qx)
UDD, 0 t 1
a
x:n|
= a
x

n
E
x
a
x+n
C,D,(m)
a
x:n|
= a
x

n
E
x
a
x+n
C,D,(m)
A
1
x:n|
= A
x

n
E
x
A
x+n
T, C, D,
A
x
= q
x
v + p
x
A
x+1
D,(m)
A
x
+ a
x
= 1 C,D,(m),T,
A
x
=
i

A
x
UDD, De Moivre, WL, T,(m)
A
x
= (1 + i)
1
2
A
x
Claims Acceleration
A
(m)
x
= (1 + i)
m1
2m
A
x
Claims Acceleration
V ar(A
x
) =
2
A
x
(A
x
)
2
C, D,WL, T, E, (m)
V ar(a
x
) =
1

2
A
x
(A
x
)
2

C, D,WL, T,(m)
V ar(L
g
0
) = (S +
Pe
d
)
2
(
2
A
x
(A
x
)
2
) C, D,WL, E, (m)
V ar(SA
x
Pa
x
) =

S +
P

2
A
x
(A
x
)
2

C, D,WL
= S
2
2
Ax(Ax)
2
(1Ax)
2
benet premium, C, D,WL
E(
t
L(x) | L(x) t) =
t
V
t
V = SA
x+t
P a
x+t
WL
= S

1
a
x+t
ax

benet premium, C, D,WL,E

= S
A
x+t
Ax
1Ax
benet premium, C, D,WL,E
t
V = (b
t+1
q
x+t
v P
t
) + p
x+t
v(
t+1
V ) Discrete, T, WL
V ar(
t
L(x) | L(x) t) =

S +
P

2
A
x+t
(A
x+t
)
2

C, D,WL
= S
2
2
A
x+t
(A
x+t
)
2
(1Ax)
2
benet premium, C, D,WL
V ar(
k
L) = p
x+k
q
x+k
[v(b
k+1

k+1
V )]
2
+ v
2
p
x+k
V ar(
k+1
L) General
a
(m)
x
= (m) a
x
(m) UDD, not temp., not A
(m)
x
A
(m)
x
=
i
i
(m)
A
x
UDD, WL, T, De Moivre, not a
(m)
x