CNSF Actuario Vida common mistakes
CNSF Actuario Vida · Understand the traps and how to avoid them.
When a problem gives a mortality table plus a temporary or deferred benefit, the candidate applies the single-year probability qx to the whole coverage period instead of building the multi-year survival chain (px, 2px, and so on) with the correct lx ratios from the table.
Most practice drills isolate one year of coverage, so candidates memorize qx and reach for it reflexively. Under exam time pressure they skip the step of identifying the benefit term and the deferment, and the table's lx column looks like a single lookup rather than a ratio between two ages.
What to do instead
Before computing, write the benefit's timing explicitly: deferment years, coverage years, payment at end or beginning of year. Then express the probability as a ratio of lx values (for example lx+n/lx for survival, or (lx+k − lx+k+1)/lx for death in a specific year) and only substitute numbers after the expression is written. Drill ten mixed-term problems where you must state the lx ratio symbolically first.
The candidate computes a net single premium or annuity value and then mixes conventions within the same problem, discounting some cash flows at the start of the year and others at the end, or switching between continuous and discrete discounting mid-calculation.
Life contingencies problems combine several building blocks (survival probabilities, discount factors, annuity-due versus immediate factors). Candidates learn each block in isolation and never internalize that the whole solution must use one timing convention consistent with the product's payment terms.
What to do instead
At the top of every solution, write one line: payment timing (start/end of year, continuous), interest basis (i or δ), and whether the benefit is paid at death or at the end of the year of death. Then use only the matching standard symbols (äx versus ax, A1x versus Āx). Recompute one problem each way to see how much the answer shifts, so the convention becomes salient.
On reserving questions the candidate computes the net premium reserve prospectively but uses the gross premium instead of the net premium, or forgets to remove the expense loading from the reserve basis entirely.
Gross premium reserves and net premium reserves share the same formula shape, and under time pressure candidates grab whichever premium figure appears in the problem statement. The distinction between the valuation premium and the contract premium is easy to blur when expenses are described in prose rather than in a formula.
What to do instead
Classify every reserve problem before computing: if the question asks for a net premium reserve, the valuation premium is the equivalence-principle premium on the valuation basis with no expenses. If it asks for a gross premium reserve, use the contract premium and include the expense cash flows in the prospective sum. Write the reserve definition in words first, then translate to symbols, and check that expenses appear only in the gross version.
The candidate treats a life insurance policy as a pure mortality product and ignores the savings or account-value component, so surrender values, policy loans, and partial withdrawals are modeled as if they were death benefits or simply omitted.
Universal life and whole life products are taught first through their death benefit, and candidates carry that mental model into questions about cash value accumulation, cost-of-insurance deductions, and surrender charges. The account mechanics are less drilled than the mortality mechanics.
What to do instead
For any permanent or universal life question, draw the account roll-forward explicitly: beginning account value, plus credited interest, minus cost of insurance on the net amount at risk, minus expense and surrender charges, equals ending account value. Identify the corridor or death benefit option rule that constrains the net amount at risk. Practice reconciling a year of account activity before answering anything about reserves or surrender values.
When a problem involves two lives, the candidate computes a joint-life probability as the product of the two individual survival probabilities even when the lives are explicitly stated to be correlated, or applies the wrong status (joint versus last-survivor) to the benefit described.
Independence is the default assumption in most textbook joint-life formulas, and candidates stop reading once they see two ages. The words 'at least one' versus 'both' also get skimmed, and joint-life and last-survivor annuities have formulas that look nearly identical.
What to do instead
Underline the status phrase in the question ('until the first death', 'until the second death', 'while both alive') and translate it into a probability statement before touching formulas: joint survival is the product only under independence; last-survivor survival is one minus the probability both have died. When dependence is stated, use the copula or conditional information given rather than multiplying. Work a paired set of joint and last-survivor problems back to back.
The candidate computes a premium or reserve correctly in the middle of the problem but reports a per-policy figure when the question asks for an aggregate, or forgets to multiply by the number of policies in force and by the face amount.
Exam questions often embed the portfolio size and face amount in a narrative paragraph, and candidates focus their working memory on the actuarial formula. Unit mismatches (per 1,000 of face versus per policy) compound the error.
What to do instead
Before writing the final answer, restate the requested unit in your own words: per policy, per 1,000 of face, or total for the block. Track units through the calculation the way you would track a currency, and keep the face amount and policy count as explicit factors in the formula rather than applying them at the end. Do a dimensional sanity check on the final number.
On annuity and pension questions the candidate uses the mortality of the general population table when the problem specifies annuitant mortality, or ignores the selection effect that makes annuitant mortality lighter than insured mortality.
The same lx table appears across many problem types, and candidates default to the table they practiced with. The annuitant-versus-insured distinction is a conceptual point that gets lost when the problem is framed as pure arithmetic.
What to do instead
Whenever the problem names a table or a population, write the table identifier next to every probability you compute. Learn the direction of the selection effect as a rule you can state in one sentence: annuitants live longer than the general population because healthier lives self-select into annuities, so annuity values are higher than a general-population table would suggest. Practice stating that direction before computing, then verify the sign of your result.
The candidate answers a pricing question by computing only the expected present value of benefits and stops, omitting the expense, commission, premium tax, and profit margin components that the question's narrative described.
Net premium problems are the most heavily drilled, so candidates pattern-match any pricing question to the net premium formula. Expense items are often scattered through a paragraph rather than presented in a table, making them easy to drop.
What to do instead
Build a checklist for gross premium problems: benefits, renewal and first-year expenses, commissions, premium taxes as a percentage of premium, and profit or contingency margin. Write each as a separate line in the equivalence-principle equation before solving. When reading the prompt, highlight every percentage and every dollar figure and assign each to a line in the equation, so nothing is left unassigned.
The candidate computes a mortality improvement or projection adjustment by applying the improvement factor once to a single age rather than cumulatively across the projection period, or applies it in the wrong direction.
Improvement scales are usually given as an annual percentage, and the natural but wrong move is to multiply the base rate by (1 − r) once. The cumulative nature of the adjustment and the direction (mortality declining over time) require deliberate handling.
What to do instead
Write the projection as an explicit product over the number of years from the base year to the projection year, and state the direction in words before computing: improvement reduces mortality rates, so the factor is below one and compounds downward. Sanity-check the result against the base rate to confirm it moved the right way and by a plausible magnitude.
The candidate leaves numerical answers unrounded or rounds at every intermediate step, producing a final figure that differs from the expected answer by more than the accepted tolerance.
Actuarial calculations chain many multiplications and divisions, and candidates either carry full precision and then truncate arbitrarily, or round each intermediate result and accumulate error. Exam answer formats often specify precision that candidates overlook.
What to do instead
Adopt a fixed policy: carry at least six significant digits through intermediate steps, round only the final answer, and check the question's stated precision before writing it down. For multiple-choice items, compute to enough precision to distinguish the closest two options rather than stopping at the first plausible match. Practice a few chained calculations both ways to see how much drift intermediate rounding introduces.