What is the premium of an insurance policy quizlet?
An insurance premium is the amount of money that an individual or business must pay for an insurance policy. The insurance premium is income for the insurance company, once it is earned, and also represents a liability in that the insurer must provide coverage for claims being made against the policy.
How is the premium in an insurance policy determined quizlet?
While they are assigned by the insurer's underwriters, premium rates are developed by the company's actuaries (i.e., insurer mathematicians). Actuaries base life insurance premiums on three factors: mortality, interest, and expenses: Mortality is the risk of death posed by the applicant. It is a charge.
What is the definition of premium quizlet?
premium. the rate that an insured is charged; fee paid for insurance/rate charged. coverage. protection provided by the terms of insurance policy.
Which of the following is the best reason to purchase life insurance?
One of the main reasons to buy life insurance is to protect your loved ones in the event you pass away sooner than expected. In particular, buying term life insurance can help reduce the risk your loved ones would face in the event of your death during the coverage period.