Major Premiums Considerations
Mortality and Death Rates
One of the core aspects of life insurance, especially with for the provider of the policy, is understanding the expected rate of death for individuals within a community. The statistical analysis of mortality rates within a specific population of people is crucial for the creation of accurate life insurance premiums.
Without knowing how often people die, on average and at what rate, an insurance company is likely to get the premium of a policy wrong – either making it too high or too low.