ABC Insurance Company calculated the amount that it expected to pay in claims under each policy sold.Rather than selling the insurance for the amount it expected to pay in claims,ABC added an allowance to cover the cost of doing business,including commissions,taxes,and acquisition expenses.This allowance is called a(n)

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The allowance added to cover the cost of doing business, including commissions, taxes, and acquisition expenses is called expense loading. Option A, policyowner dividend, is a payment made to policyholders based on the company's profits. Option B, premium, is the amount paid by the policyholder for the insurance coverage. Option D, rate credit, is the reduction in premium for policyholders who qualify for lower rates based on factors like good driving record or safety features in a car.

ABC Insurance Company Calculated the Amount That It Expected to Pay