Will start the thread by asking a question related to the syllabus materials.
In chapter 6 of individual health insurance, there is an example where the premiums are paid at the beginning of the year. So in the premium calculation, it is not adjusted for policy termination.
But at the end of the year, the expected claims per in-force policy are 1000 in the first year. However, the author discounts the claims by policies in force, 0.9 - which is the average proportion that will pay for the second year. This doesn’t make sense to me, since everyone is still in force at the end of the year. If they weren’t, then we wouldn’t be crediting a full premium. In my view, the number of policies in force eligible for claim should be 1, .9, .9^2, .9^3, and .9^4.
Can anyone help this make sense?