Which of the following statements is true about premium elements of life insurance?
A) Income from the investments is an offset in the premium calculations.
B) The premium is increased because the insurer expects to earn investment income.
C) The premium is reduced to cover the insured's marketing and administrative expenses.
D) The premium is reduced to recover the taxes levied on the insurer.
E) In calculating premiums, an actuary usually reduces the premium to cover the insurer's risk of not predicting future losses accurately.
Correct Answer:
Verified
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