What affects the amount of an insurance premium quizlet?
Asked by: Pearl Klein | Last update: September 2, 2022Score: 4.6/5 (50 votes)
The interest that insurers earn on their general account investments is an important factor in determining the premium rates it charges policyowners. The more interest the insurer can earn through its investments, the less premium it needs to charge.
What affects the amount of an insurance premium?
Some factors that may affect your auto insurance premiums are your car, your driving habits, demographic factors and the coverages, limits and deductibles you choose. These factors may include things such as your age, anti-theft features in your car and your driving record.
What factor affects insurance premiums the most quizlet?
Age of home affects insurance premiums the most. Donna, who is single and 30 years old, has received several speeding tickets recently and was shocked by the effect on her auto insurance.
What factors affect premium price?
- Underlying Security Price. Change in market price of an underlying security has a direct effect on Option Price. ...
- Option Strike Price. ...
- Time to Expiration. ...
- Interest Rate. ...
- Dividends. ...
- Volatility.
What determines your insurance premium quizlet?
Factors that can affect an auto insurance premium are: -Value of the insured vehicle: the higher the value of the car, the higher the premium. -Repair record of the car: the more easily car damage can be repaired, the lower the premium. -Your age: younger drivers have less experience and pay higher premiums.
Calculation of Insurance Premiums
Why do premiums vary quizlet?
Premiums may vary each time they are due based on the insured's current insurability. Premiums may change if the risk to the insurer increases over time. Premiums are either fixed or flexible at the option of the insurer. The payment amount does not change even though the risk to the insurer increases over time.
What is an insurance premium Everfi?
the amount of money you pay for an insurance policy.
What causes insurance premiums to increase?
Auto accidents and traffic violations are common explanations for an insurance rate increasing, but there are other reasons why car insurance premiums go up including an address change, new vehicle, and claims in your zip code.
What are the 3 main factors used in determining health insurance premiums?
Five factors can affect a plan's monthly premium: location, age, tobacco use, plan category, and whether the plan covers dependents. FYI Your health, medical history, or gender can't affect your premium.
What are the 4 major elements of insurance premium?
These elements are a definable risk, a fortuitous event, an insurable interest, risk shifting, and risk distribution.
What factors affect home insurance?
- Where you live.
- The price of your home and the cost to rebuild it.
- The amount of coverage.
- Your home's age and condition.
- Home security and safety features.
- Your credit history.
- Additional types of coverage.
- Your deductible.
Why do insurance rates vary?
Car insurance premiums can vary significantly between insurance companies due to the rating factors they use, the statistical information they look at, their own claims experience and the cost of doing business.
What is the role of insurance underwriters quizlet?
To develop and maintain a profitable book of business for the insurer. To determine what loss exposures will be insured,for what amount of insurance , at what Price, and under what conditions.
What is an insurance premium?
The amount you pay for your health insurance every month. In addition to your premium, you usually have to pay other costs for your health care, including a deductible, copayments, and coinsurance.
Which of these factors does not affect life insurance premium rates?
Which of these factors does NOT affect life insurance premium rates? Mortality, expenses, and interest are the only factors that determine premium rates. Kevin has an existing life insurance policy and assigns it to another insurer for a new contract.
How does risk affect insurance premiums?
Auto Insurance
In general, the greater the risk associated, the more expensive the insurance policy (and thus, the insurance premiums).
How is premium calculated?
- Calculating Formula. Insurance premium per month = Monthly insured amount x Insurance Premium Rate. ...
- During the period of October, 2008 to December, 2011, the premium for the National. ...
- With effect from January 2012, the premium calculation basis has been changed to a daily basis.
How does inflation affect insurance premiums?
Insurance and inflation
If those costs increase, the price of insurance premiums will likely increase as well. Unfortunately, due to inflation these costs are increasing. Building materials for homes are more expensive, there's a chip shortage driving up the cost of cars, and there's also a labor shortage.
What factors affect car insurance?
- Age. Age is a very significant rating factor, especially for young drivers. ...
- Driving history. This rating factor is straightforward. ...
- Credit score. ...
- Years of driving experience. ...
- Location. ...
- Gender. ...
- Insurance history. ...
- Annual mileage.
What is the definition of premium quizlet?
premium. the rate that an insured is charged; fee paid for insurance/rate charged. coverage.
Who pays for an insurance premium?
What is it? A premium is the amount of money charged by your insurance company for the plan you've chosen. It is usually paid on a monthly basis, but can be billed a number of ways. You must pay your premium to keep your coverage active, regardless of whether you use it or not.
What is an insurance deductible quizlet?
What is a deductible? The amount of the loss you pay when you file an insurance claim before the insurance company pays any money.
Which of the following is a factor that increases your car insurance premium quizlet?
Factors that can affect an auto insurance premium are: -Value of the insured vehicle: the higher the value of the car, the higher the premium. -Repair record of the car: the more easily car damage can be repaired, the lower the premium. -Your age: younger drivers have less experience and pay higher premiums.
What are at least two major factors that affect the cost of life insurance quizlet?
The major factors are MIX (Mortality/Interest/Expenses). The mortality factor takes the persons age and sex into consideration so they are not major risk factors. Premium Concepts; Net Single Premium = Mortality minus interest.
Which of the following factors is most important in determining your life insurance premium rate?
Age. Your date of birth is the top factor affecting your life insurance premium. There are a number of reasons why age factors into life insurance and younger policyholders pay lower premiums. As you age, the likelihood an insurer will have to pay out on your policy increases; therefore premiums increase.