Question

Why is it challenging to design charges in insurance products to correspond exactly to expenses?

a.

Insurance products typically have guaranteed charges

b.

Companies lack the necessary expertise to design charges accurately

c.

Policyholders are unwilling to pay charges that accurately reflect expenses

d.

There is no correlation between charges and expenses in insurance products

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (a).Insurance products typically have guaranteed charges Explanation:It is challenging to design charges in insurance products to correspond exactly to expenses because most products have guaranteed charges in India.

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Q. Why is it challenging to design charges in insurance products to correspond exactly to expenses?
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