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 4 of 10

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Q31.
What is the primary purpose of using a standard table for mortality rates?

a.

To save resources in constructing own mortality tables

b.

To ensure consistent pricing across the industry

c.

To analyze the company's own experience

d.

To adjust mortality rates based on future conditions

Discuss
Answer: (a).To save resources in constructing own mortality tables Explanation:The primary purpose of using a standard table for mortality rates is to save resources in constructing own mortality tables and to protect against errors that may arise.
Q32.
Why might a company adjust mortality rates from a standard table?

a.

To ensure consistency in mortality rates across different products

b.

To reflect the company's own experience and estimation of future conditions

c.

To simplify the underwriting process

d.

To reduce operational risks associated with claims processing

Discuss
Answer: (b).To reflect the company's own experience and estimation of future conditions Explanation:A company might adjust mortality rates from a standard table to reflect its own experience and estimation of future conditions, ensuring pricing accuracy.
Q33.
What alternative data source can be used if a company lacks adequate mortality experience?

a.

Standard table rates from other companies

b.

Mortality data from a similar class of business

c.

Government census data

d.

International mortality rates

Discuss
Answer: (b).Mortality data from a similar class of business Explanation:If a company lacks adequate mortality experience, it can use mortality data from a similar class of business as an alternative data source for adjustment.
Q34.
Why is it important to avoid using very old data for mortality rate adjustments?

a.

Old data may not accurately reflect current mortality trends

b.

Old data is usually unavailable

c.

Old data may result in higher premiums

d.

Old data may lead to inconsistencies in pricing

Discuss
Answer: (a).Old data may not accurately reflect current mortality trends Explanation:It is important to avoid using very old data for mortality rate adjustments because old data may not accurately reflect current mortality trends, potentially leading to pricing inaccuracies.
Q35.
What is the typical period of data used for mortality investigations?

a.

One year

b.

Three to four years

c.

Five years

d.

Ten years

Discuss
Answer: (b).Three to four years Explanation:The typical period of data used for mortality investigations is three to four years, balancing adequacy of data volume with relevance to current mortality trends.
Q36.
Why might data be classified into similar groups during analysis?

a.

To simplify the analysis process

b.

To maintain the quality of analysis by considering different mortality experiences

c.

To increase the overall mortality rate

d.

To decrease the accuracy of the analysis

Discuss
Answer: (b).To maintain the quality of analysis by considering different mortality experiences Explanation:Data might be classified into similar groups during analysis to maintain the quality of analysis by considering different mortality experiences, such as separating male and female or smoker and non-smoker groups.
Q37.
When might further adjustments need to be made to the adjusted mortality rates?

a.

When the distribution channel changes

b.

When there is a change in the target market

c.

When the basis of underwriting changes

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:Further adjustments might need to be made to the adjusted mortality rates when there are changes in the distribution channel, target market, or the basis of underwriting, as these factors can influence mortality experience.
Q38.
Why is it important to consider expected changes in mortality rates over time?

a.

To simplify the pricing process

b.

To ensure consistency in mortality rates

c.

To address risks associated with increasing longevity or mortality due to diseases

d.

To reduce operational risks

Discuss
Answer: (c).To address risks associated with increasing longevity or mortality due to diseases Explanation:It is important to consider expected changes in mortality rates over time to address risks associated with increasing longevity or mortality due to diseases, ensuring accurate pricing and risk management.
Q39.
In what scenario can future expected mortality changes be ignored?

a.

For annuities

b.

For term contracts with significant death benefits

c.

For unit-linked saving contracts

d.

None of the above

Discuss
Answer: (c).For unit-linked saving contracts Explanation:Future expected mortality changes can be ignored for unit-linked saving contracts where mortality risk is insignificant financially.
Q40.
In India, why are mortality rates assumptions particularly important for some contracts?

a.

Because premium rates are reviewable for individual class of products

b.

Because premium rates are guaranteed and not reviewable for individual class of products

c.

Because mortality rates are adjusted annually

d.

Because mortality rates are fixed and unchangeable

Discuss
Answer: (b).Because premium rates are guaranteed and not reviewable for individual class of products Explanation:In India, mortality rates assumptions are particularly important for some contracts because premium rates are guaranteed and not reviewable for individual class of products, meaning there are no chances of correcting mistakes later.
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