Question

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

a.

Formula method

b.

Cash flow method

c.

Projection method

d.

Actuarial method

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (b).Cash flow method Explanation:While both the formula method and cash flow method are used for determining the price of insurance, the cash flow method is predominantly used in the insurance industry. This method involves projecting expected incomes and outflows into the future to determine the best premium rate.

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