The likelihood of an event occurring is important in insurance as it is, along with loading costs, one of the factors that determine premiums.

The concept of severity combines both the consequences and the ability of the client or family to assume the risk.

What is the likelihood-severity relationship for a total long-term disability (loss of human capital)?

Options for Question 26:

The probability increases as the person ages, the severity increases as the person ages.

The probability decreases as the person ages, the severity increases as the person ages.

The probability increases as the person ages, the severity decreases as the person ages.