MORTALITY CHARGE Meaning and
Definition
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Mortality charge refers to a specific cost associated with life insurance policies. It is an essential component of determining the premium paid by the policyholder. This charge represents the risk borne by the insurance company due to the possibility of the insured individual passing away during the policy term.
The mortality charge is based on actuarial calculations that consider various factors such as the policyholder's age, gender, health condition, and lifestyle habits. These factors help measure the likelihood of the insured person's death, and subsequently, the insurance company's potential liability to pay out a death benefit.
The mortality charge is typically calculated by evaluating mortality tables or life expectancy data, which provide statistical information on the probability of an individual's death at different ages. Insurers utilize these tables to assess the potential risk they face by offering life insurance coverage to individuals of different demographic profiles.
The mortality charge is periodically deducted from the policyholder's premium payment and covers the insurer's expenses, including administrative costs, profit margin, and claims settlements if the insured individual passes away. The charge is based on the principle of spreading the risk among a large pool of policyholders, allowing the insurance company to ensure the financial sustainability of the policy while providing coverage against premature death.
In summary, the mortality charge is a financial component embedded within life insurance premiums that reflects the insurer's estimation of the risk associated with the occurrence of the insured person's death.
Common Misspellings for MORTALITY CHARGE
- nortality charge
- kortality charge
- jortality charge
- mirtality charge
- mkrtality charge
- mlrtality charge
- mprtality charge
- m0rtality charge
- m9rtality charge
- moetality charge
- modtality charge
- moftality charge
- mottality charge
- mo5tality charge
- mo4tality charge
- morrality charge
- morfality charge
- morgality charge
- moryality charge
- mor6ality charge
Etymology of MORTALITY CHARGE
The term "mortality charge" does not have a specific etymology, as it is a combination of two separate words: "mortality" and "charge".
1. Mortality: The word "mortality" has its origins in Latin. It comes from the Latin word "mortalitas", which in turn is derived from "mortalis", meaning "subject to death" or "mortal". "Mortalitas" was adopted into Old French as "mortalité" and then passed into Middle English as "mortalite". Eventually, it evolved into the modern English term "mortality", which refers to the state or quality of being mortal or subject to death.
2. Charge: The word "charge" has a more complex etymology. It comes from the Old French word "charger", which means "to load" or "to burden".
