Which of the Following Statements Is True About Premium Elements

question 70

Multiple Choice

Which of the following statements is true about premium elements of life insurance?

• A)Income from the investments is an offset in the premium calculations.
• B)The premium is increased because the insurer expects to earn investment income.
• C)The premium is reduced to cover the insured's marketing and administrative expenses.
• D)The premium is reduced to recover the taxes levied on the insurer.
• E)In calculating premiums, an actuary usually reduces the premium to cover the insurer's risk of not predicting future losses accurately.

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