15 November, 2006


I've just realized one thing about life insurance: the reason they don't ask you to pass a medical exam is that they're using only the age in their statistics tables. So as they know the probability of a person of each age group dying, they can base their insurance premiums solely on that.

Which means, of course, that people with serious illnesses get "better" deals than those with perfect health, but I doubt "better" is the right word here. "Less profitable" for insurers is probably a better (hehe) choice.

So perhaps the "cutoff" age, after which most insurers demand a medical exam, is a good indicator of how long a person is going to live. Because it won't be too good a life, health- and general well-being-wise, after the point when the insurance companies consider it to be too risky to insure you without a medical exam. And since the insurers are balancing between making money and competing with each other for new customers, this criteria should be quite accurate.

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