Life insurance companies use life tables containing data on thousands of people to calculate their rates for life insurance at different ages.What information would be most useful in determining these rates?
A) Survivorship, allowing prediction of risk of death at each age
B) Total fecundity, allowing prediction of the population's future size
C) Birth and death rates, showing that these do not vary within a population
D) The population growth rate, showing when population growth will level off
E) Fecundity within each age class, allowing prediction of offspring per person

Question

Quizplus · Accepted Answer

Survivorship data would be the most useful information for life insurance companies to determine their rates since it allows them to predict the risk of death at each age. This can help them calculate the appropriate premiums for individuals based on their age and potential risk of dying during the policy period. Information on population growth, fecundity, and birth and death rates are not directly relevant to calculating life insurance rates.

Life Insurance Companies Use Life Tables Containing Data on Thousands