Question
a.
Persistency of a life insurance policy indicates whether the customer is renewing his or her policy each year or quitting it midway.
b.
Persistency rates are calculated as 1 minus withdrawal rates.
c.
Persistency rates impact profits and therefore the premium to be charged for the product.
d.
Profit will depend upon the asset share vs. surrender value at the time of renewal.
Posted under IC 92 Actuarial Aspects of Product Development
Interact with the Community - Share Your Thoughts
Uncertain About the Answer? Seek Clarification Here.
Understand the Explanation? Include it Here.
Q. Which statement accurately describes persistency in life insurance policies?
Similar Questions
Explore Relevant Multiple Choice Questions (MCQs)
Q. How can insurance companies encourage regular premium payments?
View solution
Q. What approach can be used to incentivize agents to promote persistency?
View solution
Q. How can withdrawal risk be primarily controlled in insurance?
View solution
Q. What is the main factor determining the financial significance of withdrawal risk in insurance?
View solution
Q. How do withdrawals impact mortality and expense assumptions in insurance?
View solution
Q. What is model risk associated with withdrawal risk?
View solution
Q. How can term products be designed to mitigate withdrawal risk?
View solution
Q. What does withdrawal risk refer to in insurance?
View solution
Q. What factors are considered when determining the weight to give to own experience and estimation in withdrawal experience analysis?
View solution
Q. When would the presentation of withdrawal rate results require further consolidation?
View solution
Q. What is the purpose of regrouping data in withdrawal experience analysis?
View solution
Q. Which events should be excluded from the calculation of withdrawal rates?
View solution
Q. How are first-year withdrawal rates calculated?
View solution
Q. Which factors are typically considered in the grouping of data for withdrawal experience analysis?
View solution
Q. Which data source is typically the best for withdrawal experience analysis?
View solution
Q. What is the recommended time frame for persistency analysis?
View solution
Q. Why is the time period for data collection important in withdrawal experience analysis?
View solution
Q. What is the first step in deriving assumptions for withdrawal rates?
View solution
Q. How does the competitive situation of the product affect withdrawal rates?
View solution
Q. What effect does the availability of different premium payment modes have on withdrawal rates?
View solution
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!
