Welcome to Finance and Fury, The Say What Wednesday Edition

This week question comes from Matt –

Not so sure if this is your area of expertise or have come across this at all, although I have a question regarding insurance and identification of gender. People know that gender affects the price of insurance premiums paid and can save a significant amount if one were to identify as a female for insurance to pay less, would this be legal or do insurance companies have a way around this.

Cheers – from Matt,

Thanks for getting in touch. That is an awesome question!

  1. Actually, laughed out loud when this came through – very interesting point –
    1. Especially if someone does identify as another gender
  2. Today’s episode –
  3. Talk about disclosure requirements and pricing between male and females –
    1. Different genders pay different amounts for the types of covers

 

Disclosure requirements – Under current insurance legislation – non-disclosure

  1. Insurance companies only offer the options of male or female for the applications, which often is confirmed in the medical underwriting process
    1. No other when looking at actuary – a professional who deals with the measurement and management of risk and uncertainty
  2. Statistics are what insurance companies work with – based in reality and stats on claim history
    1. Interesting issue – people identifying as new genders
    2. Contacted underwires – will look at covers – but assess as biological – not what is identified as
    3. The underwriters would need medical assessments -makes it much harder to get
  3. If the incorrect gender does slip through the application process, Insurance companies would likely be able to get out of paying a claim due to ‘non-disclosure’. I.e. saying you are a female when actually you are a male would give the insurance companies an out from making any payment.

 

Premiums for genders –

  1. Premiums differ for a number of reasons – but all comes down to chance to claim
    1. Ages – really young – slightly higher, about 25-35 cheaper – then after 35 goes up more
    2. Occupations – low-risk office jobs, versus underground mining
    3. Health factors – smoking, pre-existing conditions –
      1. Smoking likely 50% more in most cases
    4. Genders – different genders claim on different covers
  2. The Income protection premiums are higher for females while Life cover premiums are higher for males,
    1. There is no clear winner in gender when it comes to overall, who pays the least amount – depends on the level of covers and types of covers

 

Run quotes

– two people Aged 40 – working in office admin job – same incomes $80k

  1. Life – $500k – More expensive for males = 32% more
    1. Male – $254
    2. Female – $192
  2. TPD – $500k – About the same
    1. Female – $192
    2. Male – $192
  3. Income Protection – $5,000 per month – more expensive for females = 56% more
    1. Male – $1,164 + 111 = $1,275
    2. Female – $1,816 +170 = $1,986
  4. Trauma – $200k – More expensive for females = 12% more
    1. Male – $610
    2. Female – $684
  5. Totals – $2,475 p.a. for male and $3,206 p.a. for females – due to claims history and likelihood to claim

 

Depending on if you need more Life – the female is cheaper, if you are male, IP is cheaper – but have to disclosure biological gender – assessment is based around this and underwriters would write off to doctors

  1. If you don’t give real gender – it will likely create a reason for insurance companies to get out of paying out

 

Thanks again for the great question. If you want to have a question answered visit https://financeandfury.com.au/contact/

Will the Australian economy experience a V-Shaped recovery?

Welcome to Finance and Fury, the Say What Wednesday edition. This week’s question from Jacob. “Hi Louis – I have a question about the forecasts of our recovery. I read that the RBA is expecting the economy to have a v shaped recovery and it seems that the share market...

Say What Wednesdays: Which platform should I choose for investing and trading?

Say What Wednesdays Which platform should I choose for investing and trading? Welcome to Finance and Fury’s ‘Say What Wednesday’. Today’s question comes from Braden, “What are the tools for young people to invest in exchange trading funds or the wider share market?...

What is happening in the Repo Market? Banks bankruptcy or just business as usual?

Welcome to Finance and Fury, The Say What Wednesday Edition Question from Mark part 2: Can you explain the repo markets that are going on at the moment? Apparently the banks are loaning money from the Feds at 10% so they have enough liquidity to survive the night/Bank...

How much do you really know about cash and how it works?

Episode 26 How much do you really know about cash and how it works? In this episode we discuss Cash. We will run through what type of asset it is, how the currency system works, and how it can be manipulated! We also discuss: The good old days of the Gold Standard...

Should I make additional mortgage repayments or start investing?

Welcome to Finance and Fury, the Say What Wednesday edition. This week’s question is from Scott: “Hi Louis, I am currently in my 30s and have recently bought my first home. I would like to get your view if I should take advantage of low interest rates and start to put...

What is the “yield curve” and can this affect the economy?

Welcome to Finance and Fury, the Say What Wednesday edition. This week’s question is continuing on the from Raj in last week’s episode. “I would love to have an overview of how certain economic factors are interlinked and impact economies” This episode look at Yield...

Should you reduce debt or use surplus cash to build wealth? Negotiating with future-you

Say What Wednesday Should you reduce debt or use surplus cash to build wealth? Negotiating with future-you Welcome to Finance and Fury, “Say what Wednesday” Where we answer questions about the world of personal finance. This week, the question isn’t from a listener...

The lessons from the Nifty Fifty. Are we repeating the same mistakes of the past?

Welcome to Finance and Fury. Today’s episode is lessons from the nifty fifties – bit of a history lesson as well as looking back to lessons that can be learnt from this, to help not make mistakes of the past. This is a particular bubble and market correct that most...

How do I make an Investment Strategy?

Welcome to Finance and Fury, today’s episode is a flow on from last Monday’s Investment philosophy episode and narrow down into an Investment Strategy. To invest properly, your investment beliefs need to expand into a strategy, an implementation plan. So Today: Expand...

What does the future of the economy look like?

Welcome to Finance and Fury, the Furious Friday edition. In today’s episode we look at what the future of the economy looks like?   First – I want to say a massive thank you to everyone who has given great feedback and your support – many of you have reached out...

Pin It on Pinterest

Share This