Question

Once the risk is classified (standard, substandard, preferred), what are the 3 FACTORS that contribute to determination of life insurance premium?

Answer 1

The three factors that contribute to the determination of life insurance premium are claims, operating costs, and profit.

Step-by-step explanation:

The three factors that contribute to the determination of life insurance premium once the risk is classified are:

1. Claims: The average person's claims over time should be covered by the premium payments.
2. Operating Costs: The premium should also cover the costs of running the insurance company.
3. Profit: The premium should leave room for the insurance company to make a profit.