ABC Insurance Company Calculated the Amount That It Expected to Pay

question 11

Multiple Choice

ABC Insurance Company calculated the amount that it expected to pay in claims for each policy sold.Rather than selling the insurance for the amount it expected to pay in claims,ABC added an allowance to cover the cost of doing business,including commissions,taxes,and acquisition expenses.This allowance is called a(n)

• A)policyowner dividend.
• B)premium.
• C)expense loading.
• D)rate credit.

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Definitions:

Leukemia

A kind of cancer targeting the blood and bone marrow, marked by an excessive creation of atypical white blood cells.

Digestive

Relating to the process by which the body breaks down food into absorbable nutrients.

Stenotic

Relating to or characterized by the narrowing or constriction of a bodily passage or opening.

Infarction

Infiltration of foreign particles; material in a vessel causing coagulation and interference with circulation.