Question

How is a life table used in insurance pricing?

a.

To calculate the insurer's profit margin

b.

To project future market trends

c.

To draw a hypothetical population using mortality rates

d.

To determine the insurer's discount factors

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (c).To draw a hypothetical population using mortality rates Explanation:A life table is used in insurance pricing to draw a hypothetical population using mortality rates at different ages. This helps in understanding the mortality risk associated with different age groups.

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Q. How is a life table used in insurance pricing?
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