Work out reserve at time t instantly with clear inputs, formula shown and shareable results.
A reserve is the fund an insurer must hold so that future premiums plus the fund cover future claims. The recursion ₜ₊₁V = [(ₜV + P)(1 + i) − q·S] / p rolls the fund forward one year: add the premium, credit interest, pay expected claims and spread the balance over survivors.
Reserve recursion
(ₜV + P)(1 + i) = q·S + p·ₜ₊₁V
Figures are estimates for planning only. Rates, mortality and market assumptions change. This is not financial, actuarial or tax advice.
The fund left after paying claims belongs to the survivors only, so it is shared among a smaller group.
Early on it can be, if the premium is back-loaded. Regulators normally floor reserves at zero for solvency reporting.