Life Insurance Basics
Why is the premium on a participating policy commonly higher than on a comparable nonparticipating policy?
Answer and explanation
Answer: A. The participating premium is deliberately loaded so that the insurer can meet adverse experience, and what proves unnecessary comes back as a dividend. The guarantees, charges and underwriting are not what differ.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, participating and nonparticipating
More life insurance basics questions
- How does an attending physician statement differ from a medical examination arranged by the insurer?
- How does an insurer usually issue a policy to an applicant classified as substandard?
- How does the needs approach differ from the human life value approach?
- How may a New York policyholder learn what the guaranty corporation protects?
- How may an insurer use a Medical Information Bureau record in underwriting an application?
- How must a producer handle a premium collected from an applicant?
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