Life Insurance Pricing:
The pricing in case of life insurance is done on the basis of:
- Life Expectancy:
In case of life insurance, the premium amount tends to be different for different customers. This differentiation is on the basis of age, medical history of a person.
Age –
E.g.: Low premium is charged for children and youngsters as it is assumed that they are at a lesser risk of death as compared to the aged people.
Medical History –
The medical history should be revealed to the insurance company by the customer in Utmost Good Faith i.e. the insured must provide to the insurer complete, correct and clear information of the subject matter of insurance.
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