CT 5 Exam Questions Flashcards
Describe how the quality of housing affects mortality and morbidity.
Standard of housing encompasses not only all aspects of physical quality of housing (repair, construction type, heating, sanitation) but also the way in which the housing is used, e.g. overcrowding and shared cooking.
These factors have an important influence on morbidity, particularly that related to infectious diseases (e.g. from tuberculosis and cholera to colds and coughs) and thus on mortality in the longer term.
The effect of poor housing is often confounded with the general effects of poverty.
Explain why lives are subdivided into separate groups for the analysis of mortality.
When a life table is constructed, it is assumed to reflect the mortality experience of a homogeneous group of lives. This table can then be used to model the experience of a homogeneous group of lives which is suspected to have a similar experience.
If a table is constructed for heterogeneous group then the mortality experience will depend on the exact mixture of lives with different experiences used to construct the table. Such a table could only be used to model mortality in a group with the same mixture.
For this reason, separate mortality tables are usually constructed for groups which are expected to be heterogeneous.
Types of selection (5)
- Class selection
- Adverse selection
- Time selection
- Temporary initial selection
- Spurious selection
Describe how education might affect mortality
Education influences awareness of healthy lifestyle that reduces morbidity and hence mortality.
Education includes formal education and public health campaigns.
List examples of the influence of education on mortality
- Increased income
- Better diet choices
- Exercise
- Health care
- Moderation in alcohol consumption or smoking
- Awareness of dangers of drug abuse
- Awareness of safe sexual lifestyle
Overhead Expense
An overhead expense is an expense that DOES NOT vary with the amount of business written.
Direct expense
A direct expense is an expense that DOES VARY with the amount of business written.
Example of an overhead expense
Central services, e.g.
- premises
- IT
- legal
Example of direct expenses
- Underwriting
- Processing proposal and issuing policy
- Initial commission
- Renewal administration
- Renewal commission
Give the commonly used assumption when dealing with multiple decrement tables
The independent forces of mortality and withdrawal are constant over each year of age.
Define the Area Comparability Factor
The ratio of the crude mortality rate in a standard population to the crude mortality rate of a sub-population, if that sub-population exhibited standard mortality.
Explain the concept of death strain at risk
The DSAR for a policy for year t+1, is the excess of the sum assured over the end-of-year reserve and any benefit payable if the life survives to the end of the year.
Profit Vector
A profit vector is the vector of expected end-year profits for policies which are still in force at the start of each year.
Profit Signature
A profit signature is the vector of expected end-year profits allowing for survivorship from the start of the contract.
Explain the relationship between gross premium provisions at successive durations
Income (opening provision plus interest on excess of premium over expense and provision) equals outgo (death claims and closing provision for survivors) if assumptions are borne out.
