Ace the Chartered Life Underwriter Challenge 2025 – Secure Your Success and Dominate the Exam!

Life insurance premiums are primarily calculated based on a range of factors that assess the risk associated with insuring a particular individual. The correct choice focuses on health history, age, lifestyle, and coverage amount, which are critical components in determining the insurance risk a company assumes.

Health history plays a significant role as it reflects any pre-existing conditions or medical issues that could affect the individual's lifespan and, consequently, the likelihood of a claim being made. Age is another vital factor since younger individuals generally have a longer life expectancy compared to older ones, influencing premiums directly—older individuals typically face higher premiums due to the increased risk of mortality.

Lifestyle factors, such as smoking, alcohol consumption, exercise habits, and overall health practices, provide insurers additional insights into risk. A healthy lifestyle often leads to lower premiums. Similarly, the coverage amount selected by the policyholder impacts the premium; higher coverage amounts result in higher premiums, reflecting the greater risk to the insurer.

While other options mention factors that may influence premiums, they do not encompass the broad and comprehensive criteria necessary to accurately calculate premiums in the life insurance industry, making the selection of health history, age, lifestyle, and coverage amount the most valid and complete answer.