Discuss the assumptions on which valuation of benefits is based while pricing of Life Insurance Products.

Valuation of benefits is a crucial aspect of pricing life insurance products. The following are the assumptions on which the valuation of benefits is based:

1. Mortality: Mortality is the most crucial assumption underlying the pricing of life insurance policies. It assumes that the insurer knows the exact probability of death for every insured individual in the insured group. Mortality tables are used to determine the probability of death at different ages and are based on historical data on death rates.

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