CMFAS M9 Risk & Life Insurance Fundamentals question: female HEALTH insurance premiums

CMFAS M9Risk & Life Insurance Fundamentals

Life insurance premiums for females are generally lower than for males of the same age. What is true of female HEALTH insurance premiums?

A They are always identical to male rates
B They are also lower than male rates
C They are set without any regard to gender
D They tend to be higher than male rates

Show the answer and explanation

Answer: D. They tend to be higher than male rates

Because females tend to live longer, their life premiums are generally lower (often via the 'reduction in age' method). For health insurance, however, female premiums tend to be higher, so gender works in the opposite direction between the two lines of cover.

Common mistake

Gender cuts the other way for health cover — female health premiums tend to be higher, not lower.

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