As long as that is not mandated, wouldn’t it result in anti-selection risk? Those with higher risk would select against your company, those with lower risk will find a better price elsewhere?
I work in group annuities and compete against carriers who utilize industry standard tables and I often wonder how that will all shake out.
Absolutely it would - which is why everybody defaults to “let’s just use competitor X’s rate +/- a few basis points and call it a day”.
I don’t think the discriminating power of those cues is as high. Certainly not gender. And we have other societal mechanisms to adjust for the effect of age.
In theory, an old person that lives past his expectation could cry foul at the youngen that died before his time.
If we are talking term life insurance (ie risk reduction rather than tax benefits) then most really old people don’t need it, right ?
In any case, age is a coarse variable. We may not control it but nobody doubts older people are closer to death than younger people.
Genes would feel more capricious for a couple of reasons. It would feel more arbitrary- what kind scientific evidence would be required to decide a gene shortened your life by XXX? And also much more fine grained. You might get singled out to pay 10 times as much because you have some rare combination of genes nobody else has. There would be no real cohort. How reliable can such a prediction be?
Using genes also sounds like it could run into discrimination problems.
I bought homeowners insurance through “Lemonade”.
It was super-cheap… though I wasn’t 100% sure I was actually buying insurance vs playing with an app for zillenials.
Kept getting texts from “Maya” the chatbot that were like “LOL time to sign the documents amirite?”
That’s a good point. Many genes are correlated with ethnic ancestry, and therefore race.
I connected a software company at the incubator I’m at, with a friend. Last night i stumbled across a site the company did for my friend. Called him, yeah, it’s a total flop. It sounds like a really good idea, I could sell the idea. But in practice, nothing. Typical insurech.
Insure-wreck, amirite???