The pricing of a series of products that combine insurance with investments, known as Unit Linked or Variable Annuities is considered. Given that there is a single premium installment, the death benefit at the time of death t is equal to the maximum between the fund value and the sum assured - i.e. max (SA; FVt), where SA is the sum assured and FVt is the fund value at the time of death t - and that the cost of insurance is collected only at the beginning, we study the calculation of the charge that needs to be made by the insurer. In calculating the cost of insurance we do not use standard actuarial methods, but rather realize that the risk borne by the insurer resembles to the payoff of an option. We follow option valuation techniques to find the insurance premium. Our approach utilizes binomial trees to model the evolution of the investment part.

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