expense premium

[Thomas H]

What is the expense premium? It is represented with P^e (P with a superscript e)

I'm studying from the ASM manual without a textbook and it appears in a problem but I can't find a definition for it.

[wat]

What is the expense premium? It is represented with P^e (P with a superscript e)

I'm studying from the ASM manual without a textbook and it appears in a problem but I can't find a definition for it.

Without having seen the context of the "expense premium", I would call it the amount such that you pay it over the same time period as the benefit premium, and it's just enough to cover the present value of expenses.

For instance, suppose you have a 10-year term policy with a face value of $2,500, first-year expense of $10 and a renewal year expense of $2. Suppose P is your premium that you would have to pay for the $2,500 coverage only. Further suppose that e is an amount such that such that paying (P + e) for 10 years will cover both the $2,500 coverage and the annual expense charges.

In this case, I would call e an "expense premium".