If you’re married and have health insurance or received health insurance quotes, then you know that men cost less to insure than women. The real question isn’t necessarily why the costs are different, but rather what makes it lower for a male instead of a female? As we learned in the female equation for life insurance, actuaries play a vital role in determining how much money an insurance company charges for insurance. An actuary is a business professional who uses mathematics, statistics, and theory to manage risk. In addition to insurance companies and other areas of the business sector, actuaries work for many different government agencies.
The same basic principal that applies in determining life insurance premium also applies in determining health insurance premium. Different factors are collected by actuaries who then insert the information into mathematical models that help determine insurance cost.
The most important factor that actuaries use is purely biological in that men cannot give birth. While many health insurance plans will not pay for the normal maternity or delivery of a child, they will pay benefits if a complication arises, even without the purchase of a maternity rider. This creates a greater risk for the insurer and thus a higher premium.
The other significant factor is again purely biological in that women have more parts inside their bodies than men do. While this fact alone does not create additional risk for the insurer, it does create more claims as women are subject to more wellness related physician services than are men.
Next we’ll take a look at wellness benefits are and what they cover.
Till then …