Which factor contributes to making a premium more attractive to potential insureds?

A premium is considered more attractive to potential insureds when it is economically feasible. This means that the cost of the premium aligns with the financial capabilities of the insured while still offering sufficient coverage for the risks involved. A premium that is both affordable and proportionate to the benefits provided is likely to appeal to a broader audience, as it facilitates easy access to insurance products without imposing an excessive financial burden.

Other factors, such as higher expected losses or high loading for expenses, can negatively impact the attractiveness of a premium because they either indicate a higher likelihood of claims or a significant portion of the premium that goes towards administrative costs rather than benefits. Offering guaranteed cash value can be an appealing feature, but it does not directly relate to the overall economic feasibility of the premium itself. Therefore, the most essential factor contributing to the attractiveness of a premium is its alignment with the economic realities faced by potential insureds.