Question

What is the primary reason for the emergence of surplus in the context of life insurance?

a.

Unpredictable market conditions

b.

Policyholders not paying premiums

c.

The actual experience being better than assumed

d.

Decline in interest rates

Posted under IC38 Life Insurance Agent Exam

Answer: (c).The actual experience being better than assumed Explanation:The primary reason for the emergence of surplus in the context of life insurance is that the actual experience of the life insurer, including factors like mortality and investment returns, is better than what the company initially assumed when setting premiums and reserves. This surplus can result from a combination of favorable factors such as lower mortality rates and higher investment returns.

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Q. What is the primary reason for the emergence of surplus in the context of life insurance?
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