Actuarial Reserve Calculator
Calculate required actuarial reserves for insurance policies and pension plans using actuarial methods.
Inputs
$
per 1000
$
Results
Required Reserve
$836,703.14
≈ 20 Teslas
Actuarial Liability
$836,703.14
≈ 20 Teslas
PV of Obligations$456,386.95
Mortality-Adjusted PV$438,474.20
Lapse-Adjusted PV$157,186.83
Reserve Ratio83.7%
How to Use This Calculator
- Enter the policy's expected future benefit payments.
- Set the valuation interest rate (prescribed by regulation or actuarial standard).
- Input the expected future premium income.
- Set the projection period in years.
- Review the net premium reserve — the liability the insurer must hold to pay future claims.
How the result changes with Annual Expenses
| Annual Expenses | Required Reserve | Actuarial Liability |
|---|---|---|
| $20,000.00 | $428,993.35 | $428,993.35 |
| $70,000.00 | $1,108,509.67 | $1,108,509.67 |
| $130,000.00 | $1,923,929.25 | $1,923,929.25 |
| $180,000.00 | $2,603,445.57 | $2,603,445.57 |
What each input means
- Future Obligations
- Total future benefit obligations
- Discount Rate
- Discount rate for present value
- Years to Maturity
- Years until obligations are due
- Mortality Rate
- Annual mortality rate
- Lapse Rate
- Annual policy lapse rate
- Annual Expenses
- Annual administrative expenses
How this is calculated
Formula
Reserve = PV(Obligations) × Survival × (1 - Lapse) + PV(Expenses)Worked example, using the default values
- Identify Input Parameters4 parametersFuture Obligations = 1000000, Discount Rate = 4, Years to Maturity = 20, Mortality Rate = 2 = 6 input(s) provided
- Calculate Required ReserveRequired Reserve836703.14 = $836,703.14
- Calculate Actuarial LiabilityActuarial Liability836703.14 = $836,703.14
- Calculate PV of ObligationsPV of Obligations456386.95 = $456,386.95
- Calculate Mortality-Adjusted PVMortality-Adjusted PV438474.2 = $438,474.2
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