Final answer:
Factors determining the purchase of paid-up additions using dividends from a life insurance policy typically include dividend size, the insured's age and health, and the cost of insurance. An actuarially fair premium is based on the present value of premiums matching expected payouts, and risk levels differ among individuals, affecting overall insurance calculations.
Step-by-step explanation:
The question is asking which factors would not determine how much coverage can be purchased using dividends from a life insurance policy to buy paid-up additions. Paid-up additions are an extra amount of life insurance coverage that is fully paid for by the dividend, and they build cash value and increase the death benefit over time. The factors that determine how much coverage can be purchased often include the size of the dividend, the insured's age and health, and the cost of insurance at the time of purchase. However, without more information about the specific choices given for the exception, it is not possible to provide the factor that would not affect the amount of paid-up coverage.
In actuarial terms, an actuarially fair premium is one where the present value of the premiums equals the present value of the expected payouts. Considering a group of men categorized by their family history of cancer, as reflected in the example, the calculation of an actuarially fair premium would differ for each group due to their different risk levels. Factors like investment income, administrative costs, and actual risk determine the premium across groups, as the company seeks to make a profit beyond covering claims and operating expenses.