Question

Which type of expenses are typically classified into initial, renewal, investment, and terminal expenses?

a.

Fixed expenses

b.

Variable expenses

c.

Direct expenses

d.

Indirect expenses

Answer: (a).Fixed expenses Explanation:In insurance companies, expenses are often categorized into various types based on their timing and nature. Initial expenses are incurred at the start of the policy term, renewal expenses occur regularly during the policy term, investment expenses relate to managing company assets, and terminal expenses arise when the policy terminates. These expenses are considered fixed as they are predetermined and not directly influenced by the size of premiums or policy activity.

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Q. Which type of expenses are typically classified into initial, renewal, investment, and terminal expenses?

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