?
Which of the below is the most appropriate explanation for the fact that young people are charged lesser life insurance premium as compared to old people?
Answer & Solution
Correct Answer:
Option
C
Mortality is related to age and hence young people who are less likely to die are charged lower premiums as compared to old people. The level premium is a premium fixed such that it does not increase with age but remains constant throughout the contract period.
Join the Discussion
Login to post a comment or share your explanation.
Login