Pricing and reserving for life insurance and life annuity products using the equivalence principle and benefit reserves.
These are the key learning objectives for Life Insurance Pricing and Reserving on SOA Exam FAM. Paraphrased from the public SOA syllabus — we recommend also checking the current syllabus on soa.org before your exam sitting.
Compute actuarial present values of life insurance and annuity benefits
Determine level and varying premiums using the equivalence principle
Calculate benefit reserves prospectively and retrospectively
Distinguish between net premium and gross premium reserves
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Because Life Insurance Pricing and Reserving is 15–20% of your exam, losing it during review costs you. FSRS brings it back at the optimal moment.
SOA Exam FAM has 7 topic areas. Life Insurance Pricing and Reserving is weighted at approximately 15–20% of the exam — here is where it sits relative to the other topics.
| Topic area | Weight |
|---|---|
| Insurance Coverages and Retirement Products | 5–10% |
| Severity, Frequency, and Aggregate Models | 15–20% |
| Parametric Estimation | 10–15% |
| Mortality and Survival Models | 10–15% |
| → Life Insurance Pricing and Reserving | 15–20% |
| Short-Term Insurance Pricing and Reserving | 15–20% |
| Option Pricing Fundamentals | 5–10% |
Structure and features of common insurance and retirement products including life insurance, annuities, health, and short-term insurance.
Statistical models for individual loss severity, claim frequency, and aggregate loss distributions including compound distributions.
Maximum likelihood and method of moments estimation for parametric models, including goodness of fit testing.
Life table construction, force of mortality, select and ultimate mortality, and multiple-decrement models.
Pricing, loss reserving, and credibility for short-term insurance products including property, casualty, and health.
Introduction to option pricing including put-call parity, binomial models, and Black-Scholes pricing for European options.
Upload your ACTEX Exam FAM digital edition, scanned ASM pages, TIA handouts, or your own notes. exclam.ai generates a fully guided study plan with adaptive flashcards and quizzes for this topic.