Question

How do withdrawal rates influence the pricing of insurance products?

a.

They have no impact on pricing

b.

They are used to determine agent commissions

c.

They are considered in the profit testing of premiums

d.

They are used to calculate policy benefits

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (c).They are considered in the profit testing of premiums Explanation:Withdrawal rates are considered in the profit testing of premiums to ensure that the pricing reflects the insurer's profitability and meets minimum profit margin criteria, preventing overcharging or undercharging of premiums.

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Q. How do withdrawal rates influence the pricing of insurance products?
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