Which of the following is the correct calculation of the insurance premium?
A) Insured Loss Claims + Loading Expenses + Fair Rate of Return - Investment Income
B) Insured Loss Claims + Loading Expenses + Investment Income - Fair Rate of Return
C) Insured Loss Claims - Loading Expenses - Investment Income + Fair Rate of Return
D) Insured Loss Claims - Loading Expenses + Fair Rate of Return + Investment Income

Question

Quizplus · Accepted Answer

The correct calculation of the insurance premium involves adding insured loss claims, loading expenses, and a fair rate of return together, then subtracting any investment income. This accounts for the costs of providing insurance, the company's expenses, the desired profit, and the reduction in premium needed due to earnings from investments.

Which of the Following Is the Correct Calculation of the Insurance