Young persons are charged lower premium as compared to older persons because

A. Young persons may not have much income to pay for the insurance

B. Older persons can afford to pay more for their insurance

C. Younger persons have lower mortality on account of lower age

D. Younger the age higher the mortality

Answer: Option C

Solution(By Examveda Team)

Young persons are charged lower premium as compared to older persons because younger persons have lower mortality on account of lower age. For example, a racecar driver faces an increased risk of death and, as a result, may pay high life insurance premiums or be denied coverage.