Question

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

a.

Formula approach

b.

Commission-based approach

c.

Risk-based approach

d.

Cash flow approach

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (d).Cash flow approach Explanation:Withdrawal rates are crucial assumptions in the cash flow approach to pricing insurance products, as they directly impact the profitability of contracts and must be accounted for in premium calculations.

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