Question

How is the discounted payback period typically used in insurance decision making?

a.

It is used as the prime criterion for selecting insurance products

b.

It is referenced alongside the net present value to inform product design

c.

It is used to calculate the total premium income of insurance companies

d.

It is employed to determine the commission rates for insurance agents

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (b).It is referenced alongside the net present value to inform product design Explanation:The discounted payback period is typically referenced alongside the net present value to inform product design in insurance decision making. While the net present value is the prime criterion, the discounted payback period provides additional information about the time it takes for the company to recover its initial investment.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. How is the discounted payback period typically used in insurance decision making?
Add Comment

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. What are some advantages of the cash flow method in insurance pricing?

View solution

Q. What is a limitation of the cash flow method in insurance pricing?

View solution

Q. What are the two known methods of determination of price in insurance?

View solution

Q. Which equation represents the determination of price in insurance using the formula method?

View solution

Q. What is an important consideration in determining the price of insurance?

View solution

Q. Which method is predominantly used for determining the price of insurance?

View solution

Q. What is an important component of the price of insurance?

View solution

Q. In an insurance company, a single decrement life table is used in calculation of premium in which of the following methods?

View solution

Q. Determine the notation that is used for the present value of 1 payable every year to a life aged x as long the life is alive before age x+n (the first payment of 1 is paid at the end of year 1 from commencement of contract).

View solution

Q. Which of the following is assumed in the cash flow method?

View solution

Q. In life insurance product pricing, deaths are determined using a set of

View solution
View All MCQs on IC 92 Actuarial Aspects of Product Development

Recommended Subjects

Are you eager to expand your knowledge beyond IC 92 Actuarial Aspects of Product Development? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!

Verbal Reasoning

Sharpen your logical thinking and reasoning abilities with our Verbal Reasoning...

Foundation Engineering

Master the principles of Foundation Engineering with our specialized category....

Civil Engineering

Dive into the world of Civil Engineering with our specialized category. Explore the...

Sociology

Gain insights into human behavior and society with our Sociology category. Explore...

Biotechnology

Discover the cutting-edge world of biotechnology with our Biotechnology category....

Biology

Dive into the realm of life sciences with our Biology category. Explore the wonders...

Bioinformatics

Unlock the power of data analysis in biology with our Bioinformatics category....

Total Quality Management

Enhance your understanding of quality management with our Total Quality Management...

Analytical Instrumentation

Dive into the world of precise measurements with our Analytical Instrumentation...