Premium Bases Mortality And Morbidity Rates MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Premium Bases Mortality And Morbidity Rates, a fundamental topic in the field of IC 92 Actuarial Aspects of Product Development. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Premium Bases Mortality And Morbidity Rates MCQs are designed to help you grasp the core concepts and excel in solving problems.

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Premium Bases Mortality And Morbidity Rates MCQs | Page 1 of 10

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Q1.
What does mortality rate measure?

a.

The number of deaths in a population per unit of time

b.

The number of individuals in poor health during a given time period

c.

The number of newly appearing cases of a disease per unit of time

d.

The number of individuals who survive a critical illness

Discuss
Answer: (a).The number of deaths in a population per unit of time Explanation:Mortality rate is a measure of the number of deaths in a population per unit of time, typically expressed as deaths per 1000 individuals per year.
Q2.
How is mortality rate typically expressed?

a.

Deaths per 100 individuals per month

b.

Deaths per 1000 individuals per year

c.

Deaths per 10,000 individuals per decade

d.

Deaths per 100 individuals per day

Discuss
Answer: (b).Deaths per 1000 individuals per year Explanation:Mortality rate is typically expressed as deaths per 1000 individuals per year.
Q3.
What is the difference between mortality rate and morbidity rate?

a.

Mortality rate refers to deaths, while morbidity rate refers to poor health.

b.

Mortality rate refers to poor health, while morbidity rate refers to deaths.

c.

Mortality rate refers to deaths, while morbidity rate refers to newly appearing cases of a disease.

d.

Mortality rate refers to newly appearing cases of a disease, while morbidity rate refers to deaths.

Discuss
Answer: (a).Mortality rate refers to deaths, while morbidity rate refers to poor health. Explanation:Mortality rate measures deaths in a population, while morbidity rate measures individuals in poor health during a given time period or newly appearing cases of a disease.
Q4.
Why is mortality rate important for insurers?

a.

It determines the profitability of insurance policies

b.

It affects the calculation of expected benefit payouts and premiums

c.

It determines the prevalence of diseases in a population

d.

It impacts the investment returns of the insurance company

Discuss
Answer: (b).It affects the calculation of expected benefit payouts and premiums Explanation:Mortality rate is crucial for insurers as it influences the calculation of expected benefit payouts and premiums based on the expected claim experience.
Q5.
How does a higher mortality rate affect insurance premiums in products covering critical illnesses?

a.

It increases premiums

b.

It decreases premiums

c.

It has no effect on premiums

d.

It leads to the cancellation of the insurance policy

Discuss
Answer: (b).It decreases premiums Explanation:In products covering critical illnesses where benefits are payable only upon the occurrence of a health problem not leading to death, a higher mortality rate results in lower benefits and therefore lower premiums.
Q6.
What does morbidity rate refer to?

a.

The number of deaths in a population per unit of time

b.

The number of individuals in poor health during a given time period

c.

The number of newly appearing cases of a disease per unit of time

d.

The number of survivors at each age

Discuss
Answer: (b).The number of individuals in poor health during a given time period Explanation:Morbidity rate refers to the number of individuals in poor health during a given time period or the number of newly appearing cases of a disease per unit of time.
Q7.
How is mortality rate defined?

a.

The number of individuals in poor health during a given time period

b.

The number of newly appearing cases of a disease per unit of time

c.

The number of deaths in a population, scaled to the size of that population, per unit of time

d.

The number of survivors at each age

Discuss
Answer: (c).The number of deaths in a population, scaled to the size of that population, per unit of time Explanation:Mortality rate is a measure of the number of deaths in a population, scaled to the size of that population, per unit of time.
Q8.
What factors influence the mortality rate used by insurers?

a.

Occupation and income level of the insured

b.

Gender and age of the insured

c.

Underwriting process and target market

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:Factors influencing the mortality rate used by insurers include the occupation, income level, gender, age of the insured, underwriting process, target market, and more.
Q9.
What is the purpose of constructing life tables?

a.

To estimate the number of deaths in a population

b.

To calculate the number of survivors at each age

c.

To determine the prevalence rate of diseases

d.

To estimate premium rates for insurance contracts

Discuss
Answer: (d).To estimate premium rates for insurance contracts Explanation:Life tables are constructed to estimate premium rates for insurance contracts based on death rates and the number of survivors at each age.
Q10.
Which of the following is NOT a factor considered in choosing a mortality rate?

a.

Operational risks

b.

Past experience of mortality rates in the economy

c.

Economic conditions of the insured

d.

Available mortality experience within the company/industry

Discuss
Answer: (c).Economic conditions of the insured Explanation:Economic conditions of the insured are not typically considered in choosing a mortality rate.
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