All of the following statements concerning the methods of providing life insurance protection are correct EXCEPT...

All of the following statements concerning the methods of providing life insurance protection are correct EXCEPT a. An insurance company can use two approaches to provide life insurance protection; term insurance, which is temporary, or cash value insurance, which is permanent protection that builds up a reserve or savings component. b. Term insurance is a form of life insurance in which the death proceeds are payable in the event of the insured's death during a specified period and nothing is paid if the insured survives to the end of that period. c. The net premium for term insurance is determined by the survival rate for the attained age of the individual involved. d. Because death rates rise at an increasing rate as ages increase, the net premium for term insurance also rises at an increasing rate.

Solutions

Expert Solution

Answer here is option c.
Option c is not correct here and we are asked to find the statement which is not correct.
Explanation:
The net premium is calculated based on mortality rates and not survival rates.
Mortality rate refers to the number of deaths of a certain group of people and at a certain period of time. To calculate net premium for term insurance, the insurance companies do not use any such term called survival rates.

jeff jeffy answered 1 year ago

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