Question

Which of the following statements is true about premium elements (computation) of life insurance?

a) Premiums are solely based on the insured's age.
b) Premiums are not influenced by health factors.
c) Premiums consider factors like age, health, and coverage amount.
d) Premiums are fixed and do not change over time.

Answer 1

Premiums consider factors like age, health, and coverage amount.

Step-by-step explanation:

The correct statement about premium elements (computation) of life insurance is c) Premiums consider factors like age, health, and coverage amount.

When setting the premium for life insurance, insurance companies take into consideration various factors such as the insured's age, health condition, and the amount of coverage they require. These factors help determine the risk associated with insuring the individual and how much the premium should be.

For example, a younger and healthier individual may typically pay a lower premium compared to an older individual with pre-existing health conditions. Additionally, a higher coverage amount may result in a higher premium.