Life Insurance Basics
If an insurer's expected investment return rises, what happens to the premium, other things being equal?
Answer and explanation
Answer: B. Premium reflects that the insurer holds and invests money before paying claims, so a higher expected return means less needs to be collected. Mortality and expense assumptions work the other way: higher expected mortality or expense raises the premium.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, effect of investment return
More life insurance basics questions
- What primary guarantee is provided to the owner of a fixed annuity contract during the accumulation phase?
- What problem does business continuation planning address?
- What right does an applicant have in respect of a Medical Information Bureau record?
- What separates permanent life insurance from term insurance?
- What should a producer do when delivering an issued life insurance policy?
- What standard does New York's Regulation 187 apply to a producer's recommendation on a life policy or annuity?
621 New York questions like this one.
Every answer explained, the ones you miss come back on a spaced schedule, and a plan built from your exam date.