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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Q61.
What are some factors considered for grouping data in mortality or morbidity analysis?

a.

Occupation and level of underwriting

b.

Age and sex

c.

Type of contract and region

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:Factors considered for grouping data in mortality or morbidity analysis include occupation, level of underwriting, age, sex, type of contract, region, duration from entry, distribution channel, smoker/non-smoker status, medical/non-medical status, and sum assured bands.
Q62.
How is the expected experience calculated in mortality or morbidity analysis?

a.

By comparing actual claims with expected claims

b.

By using a benchmark such as a standard mortality or morbidity table

c.

By analyzing past trends in claims

d.

By estimating future conditions

Discuss
Answer: (b).By using a benchmark such as a standard mortality or morbidity table Explanation:The expected experience in mortality or morbidity analysis is calculated by using a benchmark such as a standard mortality or morbidity table, against which the experience will be compared. This involves calculating the expected number of claims or amount of claims for each subgroup based on factors like age, sex, and type of contract.
Q63.
What does "Actual vs Expected (A/E)" represent in mortality or morbidity analysis?

a.

The actual number of claims compared to the expected number of claims

b.

The actual amount of claims compared to the expected amount of claims

c.

The credibility of the data used in the analysis

d.

The mortality or morbidity assumption used in practice

Discuss
Answer: (a).The actual number of claims compared to the expected number of claims Explanation:"Actual vs Expected (A/E)" represents the actual number of claims compared to the expected number of claims in mortality or morbidity analysis.
Q64.
What is the credibility analysis in mortality or morbidity analysis?

a.

A comparison of different standard tables

b.

An adjustment of standard table rates based on company experience

c.

An assessment of the reliability of the data used in the analysis

d.

A calculation of the standard deviation of claims experience

Discuss
Answer: (b).An adjustment of standard table rates based on company experience Explanation:Credibility analysis in mortality or morbidity analysis involves an adjustment of standard table rates based on company experience. This adjustment factor represents a mix of the company's own experience and its estimation of future conditions.
Q65.
How are mortality or morbidity assumptions typically represented in practice?

a.

By comparing past and future mortality rates

b.

By using a combination of own experience and industry standards

c.

By analyzing the impact of different distribution channels

d.

By adjusting standard table rates based on geographical location

Discuss
Answer: (b).By using a combination of own experience and industry standards Explanation:Mortality or morbidity assumptions in practice are typically represented by adjusting standard table rates based on a combination of the company's own experience and industry standards. For example, this may be represented as "90% of LIC 2006 – 08 mortality tables," indicating an adjustment factor based on the company's experience.
Q66.
What does credibility analysis in mortality or morbidity analysis primarily focus on?

a.

Estimation of future mortality trends

b.

Assessment of the reliability of own experience data

c.

Comparison of different standard mortality tables

d.

Calculation of the standard deviation of claims experience

Discuss
Answer: (b).Assessment of the reliability of own experience data Explanation:Credibility analysis in mortality or morbidity analysis primarily focuses on the assessment of the reliability of own experience data to determine the weight that can be placed upon it.
Q67.
How is the credibility factor calculated in mortality or morbidity analysis?

a.

It is determined based on the size of the company's data.

b.

It is derived using statistical analysis and depends on the purpose of analysis.

c.

It is fixed at 50% for all companies.

d.

It is adjusted based on industry standards.

Discuss
Answer: (b).It is derived using statistical analysis and depends on the purpose of analysis. Explanation:The credibility factor in mortality or morbidity analysis is calculated using statistical analysis and depends on the purpose of analysis. It ranges from 0% to 100% and reflects the reliance that can be placed upon the own experience data.
Q68.
What does a credibility factor of 0% signify in mortality or morbidity analysis?

a.

The data is not fit for the purpose of analysis.

b.

The data contains random fluctuations.

c.

The data is fully reliable and credible.

d.

The data is statistically significant.

Discuss
Answer: (a).The data is not fit for the purpose of analysis. Explanation:A credibility factor of 0% in mortality or morbidity analysis signifies that the data is not credible or reliable for the particular task or purpose of analysis.
Q69.
In the formula for finding adjustment factors, what does 'A' represent?

a.

The estimation of future conditions

b.

The credibility factor

c.

The own experience data

d.

The adjustment derived from industry standards

Discuss
Answer: (c).The own experience data Explanation:In the formula for finding adjustment factors, 'A' represents the own experience data in mortality or morbidity analysis.
Q70.
How does the adjustment factor change with a credibility factor of 100%?

a.

It becomes equal to the estimated experience.

b.

It becomes fully credible.

c.

It is solely based on the estimation.

d.

It becomes equal to the actual experience.

Discuss
Answer: (d).It becomes equal to the actual experience. Explanation:With a credibility factor of 100%, the adjustment factor in mortality or morbidity analysis becomes equal to the actual experience, giving full weight to the own experience data.
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