Other Premium Elements
In addition to covering mortality costs, a life insurance premium must reflect several adjustments. First, the premium is reduced to recognize that the insurer expects to earn investment income on premiums paid in advance. In this manner, most of an insurer’s investment income benefits consumers. Second, the premium is increased to cover the insurer’s marketing and administrative expenses. Taxes levied on the insurer must also be recovered. In calculating premiums, an actuary usually increases the premium to cover the insurer’s risk and expected profits. Risk charges cover any deviations above the predicted level of losses and expenses. The major premium elements for term life insurance and the actual prediction of deaths and the estimation of other premium elements are complicated actuarial processes.

Hope it clears your doubts .