Question

How do withdrawals impact mortality and expense assumptions in insurance?

a.

Higher withdrawals lead to lower mortality assumptions and higher expense per policy

b.

Lower withdrawals lead to higher mortality assumptions and lower expense per policy

c.

Withdrawals have no impact on mortality or expense assumptions

d.

Withdrawals impact mortality assumptions and expense per policy

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (d).Withdrawals impact mortality assumptions and expense per policy Explanation:Withdrawals impact mortality assumptions as the number of policies remaining inforce affects the number of deaths. Additionally, withdrawals impact expense assumptions as higher withdrawals may result in higher per-policy expenses due to fixed costs being spread over fewer policies.

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Q. How do withdrawals impact mortality and expense assumptions in insurance?
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