Which element of a life insurance premium refers to the costs incurred to maintain the insurance business?

The element of a life insurance premium that refers to the costs incurred to maintain the insurance business is known as operating expenses. These expenses include various costs necessary for the day-to-day operations of the insurance company, such as salaries, rent, utilities, marketing, and administrative tasks.

Operating expenses are crucial to the functioning of the insurer, as they ensure that the company can effectively service its policyholders and manage its insurance portfolio. In the context of calculating premiums, these expenses are factored in so that the insurer can cover its costs while fulfilling its obligations to policyholders.

While other elements like interest and mortality are also important in calculating premiums, they serve different purposes. Interest typically relates to the income earned from the insurer's investments, while mortality pertains to the risk of loss of life within the insured population. Loading refers to the additional amounts added to premiums above the basic costs, which can include possible fluctuations in mortality and operational expenses, but specifically, operating expenses directly relate to the costs of maintaining the business.