LLQP (Life Licence Qualification Program) Practice Exam · Question
What does 'experience rating' refer to in the context of group life insurance premiums?
In a Group Life insurance plan, 'experience rating' means the insurer adjusts the premiums for the group based on the actual claims history of that specific gro
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Question: What does 'experience rating' refer to in the context of group life insurance premiums?
Answer options:
- The premium is based on the average health of the entire Canadian population. ✅ The premium is adjusted based on the actual claims history of that specific group.
- The premium is fixed for the life of the group contract and cannot change.
- The premium is based on the age of the oldest member in the group.
Correct answer: The premium is adjusted based on the actual claims history of that specific group.
Explanation: In a Group Life insurance plan, 'experience rating' means the insurer adjusts the premiums for the group based on the actual claims history of that specific group. 'Manual rating' uses the insurer's general data for similar groups. Experience rating is commonly used for larger groups.
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- A life insurance policy that offers lifelong coverage, a guaranteed death benefit, and a savings component tha
- Group benefits in Canada commonly include:
- Sarah, a 35-year-old marketing professional in Ontario, purchases a participating whole life insurance policy
- Mark, a 45-year-old business owner in British Columbia, has a Universal Life policy with a Level Cost of Insur
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