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?
A. Young people are mostly dependant
B. Old people can afford to pay more
C. Mortality is related to age
D. Mortality is inversely related to age
Answer: Option C
Solution(By Examveda Team)
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.Related Questions on Insurance
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