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.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

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

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. In which approach to pricing are withdrawal rates considered a crucial assumption?

View solution

Q. How do withdrawal rates impact profits in insurance contracts?

View solution

Q. What is the asset share of a life insurance policy?

View solution

Q. How does the excess of asset share over surrender value impact profits?

View solution

Q. What effect do withdrawal terms have on profit margins?

View solution

Q. What does withdrawal rate refer to in insurance?

View solution

Q. When are surrender rates applicable in insurance policies?

View solution

Q. What is the main factor influencing withdrawal rates?

View solution

Q. Which of the following is NOT a factor considered in choosing withdrawal rates?

View solution

Q. How are withdrawal rates assumed for modeling purposes?

View solution

Q. How does an actuary determine the best estimate rate of withdrawal?

View solution

Q. What factors impact the withdrawal rates in insurance?

View solution

Q. When analyzing withdrawal rates, what is considered if the company lacks adequate data?

View solution

Q. What may necessitate adjustments to withdrawal rates?

View solution

Q. What is the aim when determining withdrawal rates?

View solution

Q. How does the type of product influence withdrawal rates?

View solution

Q. How does past experience influence withdrawal rates?

View solution

Q. How does premium frequency affect withdrawal rates?

View solution

Q. How does the general economic situation impact withdrawal rates?

View solution

Q. In the scenario of economic deterioration, how does regular premium term insurance typically fare?

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!

Human and Cultural Diversity

Explore the rich tapestry of human societies with our Human and Cultural Diversity...

Civil Engineering

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

Foundation Engineering

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

Tissue Engineering

Delve into the cutting-edge field of Tissue Engineering with our specialized...

Cytogenetics

Delve into the genetic mysteries of chromosomes with our Cytogenetics category....

Avionics Engineering

Soar into the world of aviation technology with our Avionics Engineering category....

Basic Electrical Engineering

Master the fundamentals of Electrical Engineering with our specialized category....

Drug and Pharmaceutical Biotechnology

Navigate the world of pharmaceuticals and biotechnology with our dedicated category....

Instrumentation Transducers

Master the art of instrumentation and transducers with our specialized category....