Question

How is the pure risk premium calculated for a group?

a.

Sum assured multiplied by the expected mortality rate

b.

Sum assured divided by the expected mortality rate

c.

Expected claim cost divided by sum assured

d.

Expected mortality rate divided by sum assured

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (a).Sum assured multiplied by the expected mortality rate Explanation:The pure risk premium for a group is calculated by multiplying the sum assured by the expected mortality rate. This gives an estimate of the expected claim cost for the group.

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Q. How is the pure risk premium calculated for a group?
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