Premiums Flashcards
The________ puts the insurance policy in force
initial Premium
To continuously benefit from the policy, the owner should pay the _______
subsequent premiums.
Premiums are determined based on several factors including:
-mortality factor,
-expense factor
-interest factor
-0other factors
A branch of science devoted to developing more accurate and more probable mortality table is called
Actuarial Science
______ set the premium rates and develop various insurance products
Actuaries
states that the more figures there are to study, the more the figures approach the true probability.
law of large numbers
There are operating expenses involved in the business of life insurance
expense factor
Premiums paid by different policy owners are combined and invested to earn
interest
what are the other factors that are considered in determining the insurance premiums
age, sex and insurability of the person,
size of the policy,
the kind of policy—whether it is participating or non-participating
—and the type of premium–whether it is natural or level.
as the risk of death increases, natural premiums ____
increases yearly
This type of premium remains at a constant amount from the beginning to the end of a policy.
level premium
This is the amount that allows the companies to insure individuals for the entire duration of their policy contracts.
Net dingle Premiums
since not many people can pay out large sums of money for life insurance protection, actuaries convert the net single premiums into ____
easier-to-pay net annual premiums
Net Premium = ______
Mortality Cost - Assumed Interest
Gross Premium =
Net Premium + Loading (Expense Factor)
