New York State Life Insurance Exam Questions Practice Question
Which is one of the factors that determine life premiums?
Correct Answer: D
Rationale: Life insurance premiums are primarily influenced by risk, which assesses the likelihood of a policyholder making a claim. Insurers evaluate various risk factors, including age, health, and lifestyle, to determine premium amounts.
Option A, state of residence, can affect premiums due to local regulations and healthcare costs, but it is not a primary determinant. Option B, gross premium, refers to the total premium before any deductions, not a factor influencing its calculation. Option C, credit score, may impact some insurance types but is less relevant in life insurance compared to risk assessment.
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