# This is just too much. Insurance rates based on life style. **URL:** \ **Category:** The BBQ Pit\ **Created:** [June 8, 2005, 9:41pm UTC](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508 "2005-06-08T21:41:42Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![Scissorjack](https://avatars.discourse-cdn.com/v4/letter/s/c67d28/32.png) [@Scissorjack](https://boards.straightdope.com/u/Scissorjack)\ **Post date:** [June 11, 2005, 11:31pm UTC](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508/41 "2005-06-11T23:31:58Z")
> [@Gangster Octopus](#): > > Actually, it is pretty much the opposite of gambling. Gambling increases your risk, insurance reduces it. Depends which end you’re looking at it from. ---
**Author:** ![GusNSpot](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gusnspot/32/436_2.png) [@GusNSpot](https://boards.straightdope.com/u/GusNSpot)\ **Post date:** [June 12, 2005, 8:19pm UTC](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508/42 "2005-06-12T20:19:03Z")
For instance: The Life insurance is betting you are not going to die and you are betting you will. If you don’t, you don’t, you are still don’t have the use of the money you paid in over they years. It is like a pilots license. You don’t need it until something goes wrong. What most forget or don’t know is that Insurance Co. are by law, required to make money. They will not be allowed to sell insurance if they can’t prove that they can stand the probable losses +. And we are required by either law or potential cost to have that insurance. If a family has no insurance and refuses to incur the cost or can’t afford the cost of hospitalization for a sick child, we will remove the child from them and put them in jail. And if you think that all emergency treatment must be done by law, follow me when the guy with a compound fracture of his primary arm was turned away form all hospitals in the city because of lack of insurance and personal money, including the county hospital. The reason, the Admitting NURSE determined that it was not life threatening and so he was not to be treated. This happens all the time. Follow the money, the Insurance Companies own the world. ---
**Author:** ![Gangster\_Octopus](https://avatars.discourse-cdn.com/v4/letter/g/a8b319/32.png) [@Gangster\_Octopus](https://boards.straightdope.com/u/Gangster_Octopus)\ **Post date:** [June 13, 2005, 1:24am UTC](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508/43 "2005-06-13T01:24:29Z")
> [@Case Sensitive](#): > > Depends which end you’re looking at it from. What do you mean? Gambling almost always is an increase in risk. The wole point of insurance is to reduce risk. You are gambling if you don’t buy the insurance, generally. ---
**Author:** ![OtakuLoki](https://avatars.discourse-cdn.com/v4/letter/o/ac8455/32.png) [@OtakuLoki](https://boards.straightdope.com/u/OtakuLoki)\ **Post date:** [June 13, 2005, 1:48am UTC](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508/44 "2005-06-13T01:48:33Z")
The insurance company is gambling that it will take in more money from it’s premiums based on the acturial (sp) tables it has developed than it will have to pay out in benefits. Unfortunately, acturial tables are no guarantee of future performance. For example, I believe a number of Life Insurance companies came close to bankruptcy (If not going all the way over into it.) after the 1919 flu epidemic. ---
**Author:** ![Weirddave](https://avatars.discourse-cdn.com/v4/letter/w/919ad9/32.png) [@Weirddave](https://boards.straightdope.com/u/Weirddave)\ **Post date:** [June 13, 2005, 4:04am UTC](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508/45 "2005-06-13T04:04:06Z")
> [@GusNSpot](#): > > For instance: > The Life insurance is betting you are not going to die and you are betting you will. If you don’t, you don’t, you are still don’t have the use of the money you paid in over they years. Only if you were stupid enough to buy term life insurance. ---
**Author:** ![Neurotik](https://avatars.discourse-cdn.com/v4/letter/n/91b2a8/32.png) [@Neurotik](https://boards.straightdope.com/u/Neurotik)\ **Post date:** [June 13, 2005, 1:21pm UTC](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508/46 "2005-06-13T13:21:00Z")
> [@Weirddave](#): > > Only if you were stupid enough to buy term life insurance. Not necessarily. Term life insurance is considerably cheaper than various whole life policies. The money saved would often be better spent in various investments (let’s not get into variable life policies here) than putting it into a whole life policy. ---
**Author:** ![Cemetery\_Savior](https://avatars.discourse-cdn.com/v4/letter/c/439d5e/32.png) [@Cemetery\_Savior](https://boards.straightdope.com/u/Cemetery_Savior)\ **Post date:** [June 13, 2005, 4:20pm UTC](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508/47 "2005-06-13T16:20:12Z")
> [@Weirddave](#): > > Actually, a CDHP is a completely different thing, it has nothing to do with lifestyle discounts. It’s been a weekend, but I don’t think I referenced lifestyle discounts. CDHPs offer lifestyle incentives, in some forms. ---
**Author:** ![Cemetery\_Savior](https://avatars.discourse-cdn.com/v4/letter/c/439d5e/32.png) [@Cemetery\_Savior](https://boards.straightdope.com/u/Cemetery_Savior)\ **Post date:** [June 13, 2005, 4:22pm UTC](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508/48 "2005-06-13T16:22:44Z")
> [@Neurotik](#): > > Not necessarily. Term life insurance is considerably cheaper than various whole life policies. The money saved would often be better spent in various investments (let’s not get into variable life policies here) than putting it into a whole life policy. And, there are 100% refundable (after your term) policies avaialble. For example, I pay in $1,000 of premium for 10 years, and after the 10 years elapse, I get $1,000 paid back to me. Insurance companies make a good deal of $$ off of the interest gained from your premiums, so they offer this as a more-expensive option for people that “want their premiums back” -Cem ---
**Author:** ![js\_africanus](https://avatars.discourse-cdn.com/v4/letter/j/87869e/32.png) [@js\_africanus](https://boards.straightdope.com/u/js_africanus)\ **Post date:** [June 13, 2005, 9:06pm UTC](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508/49 "2005-06-13T21:06:02Z")
> [@picunurse](#): > > Ah Ha! I acknowledge your rant, and assert that it is one-sided and uninformed. When your unhealthy habits are not taken into account, those with healthy habits are forced to subsidize your unhealthy lifestyle. You have two legitimate concerns: privacy vs. fairness, and a balance surely needs to be struck; one shouldn’t trump the other. By failing to understand this, you have put yourself in with the those on the other side who think that employers should be allowed to dictate whether an employee may smoke on her free time. ---
**Author:** ![saoirse](https://avatars.discourse-cdn.com/v4/letter/s/5daacb/32.png) [@saoirse](https://boards.straightdope.com/u/saoirse)\ **Post date:** [June 13, 2005, 10:09pm UTC](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508/50 "2005-06-13T22:09:37Z")
> [@Cemetery Savior](#): > > Let’s play “ask an Insurance Industry Veteran”! > > The plan that you’re describing is called a CDHP, or Consumer-Driven Health Plan. It’s the latest wrinkle, which attempts to motivate employees to maintain a more healthy lifestyle. > > “How?” you ask? It’s based upon the HSA (Health Savings Account) legislation enacted by GWB on 1/1/04 (and the previous HRA legislation). Given the existence of an overlying “High Deductible” medical insurance plan, the employee can have access to a pot of money provided entirely by the sponsoring company (HRA), or provided by a combination of company and employee funds (HSA). The money is tax-deferred (usually), and can be taken out tax-free for IRS-mandated reimbursements. > > There really isn’t any de facto discrimination here, if I understand the OP’s situation correctly. Most plans set up a series of incentives which will add to the pot o’money if conditions are met. For example: > [ul] > [li]Not a smoker = $100[/li][li]BMI under 20 = $100[/li][li]Recently-completed physical = $100[/li][li]And so on…[/li][/ul] > > So, it’s not technically a discrimination. Yes…it looks like one when you view your balance versus the clean-livin’ exercise guru in the next cubicle, but the framework is supposed to motivate you to GET those incentives by following the roadmap. > > Get used to 'em, folks! Everyone is going to have one (unless you’re one of the lucky ones in one of those patriarchal benefits-oriented law firms!) by 2006. Quote me on it. > > -Cem **Cem,** how would you feel about a MedB provider giving retirees PRA+ Questionnaires and basing their premiums on their scores? Say \<.250, Gold; \<.750 Silver; \<1.000, Bronze; \>1.000 Have you considered Kaiser Permanente? Of course, it would never happen, even though you could identify pretty accurately who was going to cost you in the long run doing just that. Health insurance, as opposed to automobile insurance, is a matter of spreading the risk for everyone, or at least everyone possible. The health insurers would love to only bet on the 7-5’s and leave the 10-1s to someone else. They may not do that, because that drives up the premiums for all but the healthiest. -Saoirse, burnt out 5-year veteran of a N-F-P MedB provider. ---
**Author:** ![duffer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/duffer/32/1026_2.png) [@duffer](https://boards.straightdope.com/u/duffer)\ **Post date:** [June 14, 2005, 6:43am UTC](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508/51 "2005-06-14T06:43:26Z")
Couple of thoughts on this. **Car insurance**. The premiums are based on actuarial tables taking into account age, previous violations, gender, marital status, etc. What you pay is based on statistical data that a given driver will need to file a claim. For instance, a 21 year old single guy drving a '68 Charger is going to have a higher base rate than a 38 year old mother of 3 driving a Taurus. Why? It’s more likely the kid will cause the company to pay a claim. Doesn’t mean the mom won’t go out for a few drinks to unwind from stress and kill the kid on her way home. It’s just statisically more likely the kid will nail her car racing from a stop sign. So he pays more to compensate for the risk. If the mom does something to cause a claim, her rates go up to compensate. If the kid does something stupid, his rates go up to compensate the value. _Even though his rates were already jacked up to compensate the risk._ And if he sails through life causing no harm? That extra money is justified in covering the loss paid to another driver. Who is paying higher premiums to cover the risk. See a pattern? **Health care** : Are you kidding me? Do we need to look into ways to cut costs? How about people that go to the doctor for any sniffle or headache they have? My wife worked with a woman that has no fewer than 8 appointments in any given month with a GP or specialist. There is nothing chronically wrong. It’s rather obvious that it’s an attention ploy or all-out hypochondria. But there are no incentives to limit the number of claims she can file. And I’d love for someone to explain why my doc charges the insurance $98 every month for a 10 minute consult to make sure the meds aren’t causing unwanted side effects. I could easily call his nurse to say “Still feeling good, call you next month,” For what Blue Cross pays him per month, I could get 3 months of scripts from the evil drug companies. And no, I can’t go somewhere else. It’s these folks or pay out-of-coverage prices to go to Fargo. I weep for us all when the life insurance companies take this system and twist it to their advantage. I can honestly see a future where the coverage isn’t honored because a person’s cholesterol of BMI isn’t in strict accordance of set values. ---
**Author:** ![js\_africanus](https://avatars.discourse-cdn.com/v4/letter/j/87869e/32.png) [@js\_africanus](https://boards.straightdope.com/u/js_africanus)\ **Post date:** [June 14, 2005, 1:12pm UTC](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508/52 "2005-06-14T13:12:04Z")
> [@saoirse](#): > > Health insurance, as opposed to automobile insurance, is a matter of spreading the risk for everyone, or at least everyone possible. :dubious: I’m pretty sure automobile insurance is governed by the same mathematics as health insurance. ---
**Author:** ![Fuji\_Kitakyusho](https://avatars.discourse-cdn.com/v4/letter/f/f0a364/32.png) [@Fuji\_Kitakyusho](https://boards.straightdope.com/u/Fuji_Kitakyusho)\ **Post date:** [June 14, 2005, 1:58pm UTC](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508/53 "2005-06-14T13:58:46Z")
Double-edged sword. I want to be healthy and fit, so I try to maintain an active lifestyle. Unfortunately, in the course of getting outdoors and not being sedentary I got myself involved in so many “high risk” sports and activities that I am now completely ineligible for life insurance. My ticker’s great, though. ---
**Author:** ![saoirse](https://avatars.discourse-cdn.com/v4/letter/s/5daacb/32.png) [@saoirse](https://boards.straightdope.com/u/saoirse)\ **Post date:** [June 14, 2005, 11:53pm UTC](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508/54 "2005-06-14T23:53:21Z")
> [@js\_africanus](#): > > :dubious: > > I’m pretty sure automobile insurance is governed by the same mathematics as health insurance. No, actually, it’s not. If you’ve had an MI, been hopitalized in the past year, and have diabetes, you pay the same rates as anyone else. In fact, by federal law, an HMO is forbidden to charge you a different rate based upon “pre-existing conditions.” An auto insurer does exactly that. If you have a habit of speeding and causing accidents, your rates go up. If you’re priced out of auto insurance, well, that means you won’t be hitting any other drivers anyway, so you’re either off the road or your paying in advance for the mayhem you’ll cause. If you’re priced out of health insurance, you die of strept throat. Actuially you more likely go to the emergency room, where they cannot refuse you treatment, and get your antibiotics. Hopefully, you’ll be “irresponsible,” and go there while you can still walk a straight line, and don’t have to stay overnight. Either way, the hospital recuops its losses by charging the rest of their customers more. And those customers are the HMOs who priced you out of the system in the first place. They won’t lose money, though. They’ll charge those healthy folks more, for less coverage. ---
**Author:** ![Weirddave](https://avatars.discourse-cdn.com/v4/letter/w/919ad9/32.png) [@Weirddave](https://boards.straightdope.com/u/Weirddave)\ **Post date:** [June 15, 2005, 12:26am UTC](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508/55 "2005-06-15T00:26:38Z")
> [@Cemetery Savior](#): > > It’s been a weekend, but I don’t think I referenced lifestyle discounts. CDHPs offer lifestyle incentives, in some forms. Would you explain what you mean by “lifestyle incentives” before I comment further? Because CDHPs have nothing to do with anything I would call a “lifestyle incentive”, but I’d like to know what you mean before I reply. > [@Neurotik](#): > > Not necessarily. Term life insurance is considerably cheaper than various whole life policies. The money saved would often be better spent in various investments (let’s not get into variable life policies here) than putting it into a whole life policy. You are absolutely correct. Ask any financial adviser and they will tell you exactly that. Ask any _honest_ financial adviser and they will admit that 95% of the population _won’t_ faithfully invest the difference between whole or universal life and term life rates, making the point moot. ---
**Author:** ![Weirddave](https://avatars.discourse-cdn.com/v4/letter/w/919ad9/32.png) [@Weirddave](https://boards.straightdope.com/u/Weirddave)\ **Post date:** [June 15, 2005, 12:30am UTC](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508/56 "2005-06-15T00:30:56Z")
> [@saoirse](#): > > No, actually, it’s not. If you’ve had an MI, been hopitalized in the past year, and have diabetes, you pay the same rates as anyone else. In fact, by federal law, an HMO is forbidden to charge you a different rate based upon “pre-existing conditions.” An auto insurer does exactly that. I don’t know if there is a specific exception for HMOs, but it is absolutely false that Health Insurance companies can not charge more for people with pre-existing conditions, in fact they can and do rate up or even decline such people regularly. (The previous applies to private insurance policies and not those provided by an employer) ---
**Author:** ![I\_Love\_Me\_Vol.I](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/i_love_me_vol.i/32/521_2.png) [@I\_Love\_Me\_Vol.I](https://boards.straightdope.com/u/I_Love_Me_Vol.I)\ **Post date:** [June 15, 2005, 12:49am UTC](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508/57 "2005-06-15T00:49:41Z")
> [@Binarydrone](#): > > but the truth is that 100% of people that have been in a wreck have been in a wreck but not 100% of the people that speed will be in wrecks. On the other hand, 100% of the people who speed went over the speed limit but not 100% (pehaps alot less) of the people in wrecks CAUSED those wrecks. ---
**Author:** ![askeptic](https://avatars.discourse-cdn.com/v4/letter/a/eb9ed0/32.png) [@askeptic](https://boards.straightdope.com/u/askeptic)\ **Post date:** [June 15, 2005, 12:58am UTC](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508/58 "2005-06-15T00:58:49Z")
> [@I Love Me](#): > > On the other hand, 100% of the people who speed went over the speed limit but not 100% (pehaps alot less) of the people in wrecks CAUSED those wrecks. You have not been following this thread have you? 😛 ---
**Author:** ![Neurotik](https://avatars.discourse-cdn.com/v4/letter/n/91b2a8/32.png) [@Neurotik](https://boards.straightdope.com/u/Neurotik)\ **Post date:** [June 15, 2005, 1:40am UTC](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508/59 "2005-06-15T01:40:22Z")
> [@Weirddave](#): > > You are absolutely correct. Ask any financial adviser and they will tell you exactly that. Ask any _honest_ financial adviser and they will admit that 95% of the population _won’t_ faithfully invest the difference between whole or universal life and term life rates, making the point moot. While I agree with that, 95% of the population also won’t need the same amount of life insurance over the course of their lives. The best policy, as usual, is a mix of various whole and term policies. Getting a term policy isn’t a stupid idea. Usually. ---
**Author:** ![js\_africanus](https://avatars.discourse-cdn.com/v4/letter/j/87869e/32.png) [@js\_africanus](https://boards.straightdope.com/u/js_africanus)\ **Post date:** [June 15, 2005, 2:33pm UTC](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508/60 "2005-06-15T14:33:11Z")
> [@saoirse](#): > > No, actually, it’s not. If you’ve had an MI, been hopitalized in the past year, and have diabetes, you pay the same rates as anyone else. In fact, by federal law, an HMO is forbidden to charge you a different rate based upon “pre-existing conditions.” An auto insurer does exactly that. You’re confusing federal law w/ mathematics. The insurer may be more constrained in terms of what she can use to group people; however, the math is still the same and the idea behind insurance is still the same regardless of what the law says. [Previous page](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508.md?page=2) [Next page](https://boards.straightdope.com/t/this-is-just-too-much-insurance-rates-based-on-life-style/307508.md?page=4)