Question

_________________ is charged to individuals if the predictive mortality does not deviate much as compared to that indicated in the mortality table provided by the actuaries.

a.

Sub-standard premium

b.

Standard premium

c.

Extra premium

d.

Loaded premium

Posted under IC22 Life Insurance Underwriting

Answer: (b).Standard premium Explanation:In life insurance, actuaries use mortality tables to predict the probability of death at a given age. If an individual's predicted mortality does not deviate much from that indicated in the mortality table, they will be charged the standard premium. The standard premium is the basic premium charged by the insurance company to provide coverage based on the risk profile of the individual. If an individual is deemed to have a higher risk profile, they may be charged an extra premium (option C), which is also known as a rating or a surcharge. A sub-standard premium (option A) is charged to individuals who are considered to be high risk due to medical conditions or other factors that increase the likelihood of death. A loaded premium (option D) refers to the premium charged by an insurance company that includes expenses and fees in addition to the risk premium.

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Q. _________________ is charged to individuals if the predictive mortality does not deviate much as compared to that indicated in the mortality table provided by the actuaries.
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