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.

In this section, you'll find a wide range of Premium Bases Mortality And Morbidity Rates mcq questions that explore various aspects of Premium Bases Mortality And Morbidity Rates problems. Each MCQ is crafted to challenge your understanding of Premium Bases Mortality And Morbidity Rates principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 92 Actuarial Aspects of Product Development tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Premium Bases Mortality And Morbidity Rates MCQs are your pathway to success in mastering this essential IC 92 Actuarial Aspects of Product Development topic.

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

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Q91.
What is the main objective of experience analysis in insurance?

a.

It has no influence on assumptions

b.

It ensures consistency between underwriting and assumptions

c.

It increases the complexity of assumptions

d.

It reduces the need for assumptions

Discuss
Answer: (b).It ensures consistency between underwriting and assumptions Explanation:The main objective of experience analysis in insurance is to ensure consistency between underwriting decisions and the assumptions used for pricing, as well as to monitor trends and performance for informed decision-making.
Q92.
What is the importance of data quality in experience analysis?

a.

It has no influence on assumptions

b.

It ensures consistency between underwriting and assumptions

c.

It increases the complexity of assumptions

d.

It reduces the need for assumptions

Discuss
Answer: (d).It reduces the need for assumptions Explanation:Data quality in experience analysis is crucial as it reduces the need for assumptions by providing reliable information, ensuring consistency between underwriting and assumptions, and simplifying the analysis process.
Q93.
How is the credibility factor used in deriving mortality or morbidity assumptions?

a.

It has no influence on assumptions

b.

It ensures consistency between underwriting and assumptions

c.

It increases the complexity of assumptions

d.

It reduces the need for assumptions

Discuss
Answer: (d).It reduces the need for assumptions Explanation:The credibility factor is used to weigh own experience and estimation of future conditions in deriving mortality or morbidity assumptions, reducing the need for assumptions and ensuring a more accurate reflection of the risk profile.
Q94.
What is the primary method of controlling mortality or morbidity risk in insurance?

a.

Underwriting

b.

Reinsurance

c.

Experience analysis

d.

Data validation

Discuss
Answer: (a).Underwriting Explanation:Underwriting is the primary method of controlling mortality or morbidity risk in insurance by assessing and selecting risks that align with the insurer's risk appetite and pricing assumptions.
Q95.
An insurance company sells 1000 policies and it expects 5 claims. The total amount of claims is Rs. 2,50,000/-. If the period of cover is one year and if the company wants its total income to be equal to the total outgo, what premium should the company charge from each of those 1000 policyholders?

a.

Rs.250/-

b.

Rs.500/-

c.

Rs.100/-

d.

Rs.2500/-

Discuss
Answer: (a).Rs.250/- Explanation:Total amount of claim / No. of policyholders = Rs. 250000 / 1000 = Rs. 250.
Q96.
Which of the following is not a factor to determine the rate of premium?

a.

Life table

b.

Underwriting expenses

c.

Classes of individuals

d.

Color of skin

Discuss
Answer: (d).Color of skin Explanation:Color of skin does not affect the premium. All other mentioned factors help us to determine the rates of premium.
Q97.
From an underwriter’s point of view, while deciding on pricing of products, what can be the best scenario that can be assumed with regards to mortality rates?

a.

Where number of claims are higher than expected number of claims

b.

Where number of claims are equal to expected number of claims

c.

Where number of claims are lower than or equal to expected number of claims

d.

Where number of claims are higher than or equal to the expected number of claims

Discuss
Answer: (c).Where number of claims are lower than or equal to expected number of claims Explanation:Where number of claims is lower than or equal to expected number of claims.
Q98.
Poor health raises the rates for life insurance because

a.

There is a risk of dying during the policy

b.

It decreases number of years one is likely to pay premiums

c.

It reduces the time before which the company may have to pay a claim

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:As there is a risk of dying during the policy period due to poor health, the company is required to pay the claim early, and it also decreases the number of years one is likely to pay premiums.
Q99.
Which of the following is not a factor to determine mortality or morbidity rates?

a.

Census rate

b.

Past rates of mortality in the economy

c.

Birth rate

d.

Reinsurers’ rates

Discuss
Answer: (c).Birth rate Explanation:Birth rate is not a factor to determine mortality or morbidity rates. Other given rates are required to calculate the mortality and morbidity rates.
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