Exam LTAM: Long-Term Actuarial Mathematics Study Guide
Life insurance, life annuities, premium calculation, reserves, multiple life and decrement models, and pension mathematics.
Overview
Exam LTAM covers long-term actuarial mathematics used in life insurance, health insurance, and pension valuation. Topics include survival models, life insurance and annuity pricing, premium calculation, reserves, multiple-life models, and multiple-decrement models. This is one of the more challenging preliminary exams due to the breadth and depth of the material.
Exam Format
- Duration
- 240 minutes (4 hours)
- Questions
- 30 multiple-choice questions
- Pathway
- SOA
- Format
- Computer-based testing (CBT)
Topic Breakdown
Survival Models
10-15%Force of mortality, curtate and complete future lifetime, life tables, fractional age assumptions (UDD, constant force)
Life Insurance
15-20%Whole life, term, endowment, deferred insurance, varying benefits, actuarial present values
Life Annuities
15-20%Whole life, temporary, deferred, certain-and-life, annuities-due and annuities-immediate
Premiums
10-15%Net premiums, gross premiums, equivalence principle, loss-at-issue random variable
Reserves
15-20%Net premium reserves, gross premium reserves, prospective and retrospective methods, recursive formulas
Multiple Life Models
10-15%Joint-life and last-survivor statuses, independent and dependent lives, common shock model
Multiple Decrement Models
10-15%Associated single decrements, dependent rates, service tables, pension plan valuation
Recommended Study Approach
- 1
Build a solid understanding of survival models and life tables before moving to insurance and annuity functions.
- 2
Memorize the key actuarial notation (A_x, a-double-dot_x, etc.) and the relationships between insurance and annuity present values.
- 3
Practice net premium reserve calculations using both the prospective and retrospective methods.
- 4
Work through multiple-decrement problems using the associated single-decrement framework.
- 5
Study pension mathematics by understanding the different benefit formulas (career average, final average) and their actuarial present values.
- 6
Allocate extra time to the written-answer portion of the exam, and practice writing clear, structured solutions.