What are the three key considerations for insurance pricing (MDL)?

The three key considerations for insurance pricing involve understanding the risks associated with insuring individuals and determining how those risks impact the pricing of policies. The correct answer highlights mortality expectation, the discount rate, and the load.

Mortality expectation refers to the statistical assessment of the likelihood of policyholders dying within a certain timeframe, which is crucial for life insurance pricing. Insurers use mortality tables to predict the expected number of claims based on demographic factors.

The discount rate is important for determining the present value of future payouts. Insurers need to calculate how much money they should set aside today to meet future claims, incorporating the time value of money.

The load accounts for the costs associated with administering the policy, including administrative expenses and expected profit margins. This allows insurers to cover operational costs while still offering competitive pricing.

The other options focus on different aspects of insurance and risk management, which may not align perfectly with the fundamental considerations specifically for pricing insurance contracts. Therefore, understanding the critical elements of mortality expectation, the discount rate, and the load is essential for pricing insurance effectively.