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.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Premium Bases Mortality And Morbidity Rates. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your Premium Bases Mortality And Morbidity Rates knowledge to the test? Let's get started with our carefully curated MCQs!

Premium Bases Mortality And Morbidity Rates MCQs | Page 2 of 10

Discover more Topics under IC 92 Actuarial Aspects of Product Development

Q11.
What is the purpose of making pessimistic and optimistic estimates for mortality or morbidity rates?

a.

To ensure accurate calculation of premiums

b.

To choose a prudent rate for meeting shareholders' objectives

c.

To reduce the number of claims incurred by the insurer

d.

To estimate the rate of improvements in the economy

Discuss
Answer: (b).To choose a prudent rate for meeting shareholders' objectives Explanation:Pessimistic and optimistic estimates for mortality or morbidity rates are made to choose a prudent rate for meeting shareholders' objectives.
Q12.
How does the insurer adjust mortality rates for assured lives and annuitants?

a.

For assured lives, higher mortality rates are used; for annuitants, lower mortality rates are used

b.

For both assured lives and annuitants, higher mortality rates are used

c.

For both assured lives and annuitants, lower mortality rates are used

d.

Mortality rates are not adjusted for assured lives or annuitants

Discuss
Answer: (a).For assured lives, higher mortality rates are used; for annuitants, lower mortality rates are used Explanation:For assured lives, higher mortality rates are used, while for annuitants, lower mortality rates are used to adjust mortality rates.
Q13.
What factors are considered in determining mortality or morbidity rates?

a.

Economic conditions and shareholder objectives

b.

Past experience, future conditions, and industry data

c.

Premium calculations and reinsurance data

d.

Assumption setting and historical analysis

Discuss
Answer: (b).Past experience, future conditions, and industry data Explanation:Factors considered in determining mortality or morbidity rates include past experience, estimation of future conditions, and industry data.
Q14.
How does the importance placed on mortality or morbidity rates depend on the product?

a.

It depends on the extent of mortality or morbidity risk of the product

b.

It depends on the insurer's geographic operation

c.

It depends on the underwriting controls applied

d.

It depends on the target market for the contract

Discuss
Answer: (a).It depends on the extent of mortality or morbidity risk of the product Explanation:The importance placed on mortality or morbidity rates depends on the extent of mortality or morbidity risk of the product.
Q15.
What data sources can be used if a company or product has no historical experience?

a.

Government census data

b.

Experience of similar products and industry data

c.

Reinsurance data and consultant estimates

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:If a company or product has no historical experience, industry data, experience of similar products, reinsurance data, and consultant estimates can be used as data sources.
Q16.
What factor influences the mortality experience of the insured population based on the target market for the contract?

a.

Economic conditions

b.

Underwriting controls

c.

Distribution channels

d.

Reinsurance terms

Discuss
Answer: (c).Distribution channels Explanation:The mortality experience of the insured population is influenced by the target market for the contract, which depends on factors such as distribution channels.
Q17.
How does the type of product affect underwriting controls?

a.

Unit-linked products require stricter underwriting controls

b.

Term insurance contracts require lower underwriting controls

c.

Underwriting controls are not affected by the type of product

d.

Different products may require varying levels of underwriting controls

Discuss
Answer: (d).Different products may require varying levels of underwriting controls Explanation:The type of product can affect underwriting controls, with different products requiring varying levels of underwriting controls.
Q18.
What is the purpose of underwriting controls in the insurance industry?

a.

To discourage customers from purchasing policies

b.

To reduce the mortality experience of the insured population

c.

To evaluate the health of policyholders

d.

To increase the cost of premiums

Discuss
Answer: (c).To evaluate the health of policyholders Explanation:The purpose of underwriting controls is to evaluate the health of policyholders and determine the best terms for insurance coverage.
Q19.
How does strict underwriting benefit customers?

a.

It increases premiums

b.

It discourages anti-selection and fraud

c.

It reduces mortality experience

d.

It eliminates the need for medical checkups

Discuss
Answer: (b).It discourages anti-selection and fraud Explanation:Strict underwriting benefits customers by reducing anti-selection and fraud risks, ensuring fair treatment for all lives, and ultimately leading to better mortality experience.
Q20.
What additional benefit is gained with strict underwriting controls?

a.

Higher premiums for policyholders

b.

Favorable reinsurance terms

c.

Reduced mortality rates

d.

Increased distribution channels

Discuss
Answer: (b).Favorable reinsurance terms Explanation:With strict underwriting controls, insurers can negotiate favorable reinsurance terms, leading to reduced premiums for policyholders.
Page 2 of 10