Actuaries begin the process of calculating life insurance premium rates by using mortality tables, which help predict future experience but not with 100 percent certainty. How do actuaries compensate for this uncertainty when determining the gross premium charged to the policyowner?
A.They assume a higher rate of interest than actually expected, which provides a safety margin by increasing the gross premium.
B.They assume there will be fewer deaths than their past mortality experience would predict, which provides a safety margin by increasing the gross premium.
C.They add an expense load, which includes a safety margin factor, to the net premium to produce the gross premium.
D.They add a safety margin load to the mortality charge, increasing the net premium.
