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/

Don’t get tricked! How to avoid living in a Trauma-based society by building towards your own future

Welcome to Finance and Fury, the Furious Friday Edition Today's episode is number 3 in this series – check out last 2 FF eps  episode 1 episode 2 Last ep – talked about media and the realities that they create – but they are not consistent – and massive hypocrites...

How to start taking investment actions today for a better you tomorrow.

Welcome to Finance and Fury. What is important when it comes to investing? Or which is the more important – what you know or what you do? Sometimes the more you know – the harder it is to invest – information overload – can be a curse of knowledge – if you knew...

What is Luck? And how can we be manipulated through information, destroying the luck that we have

Welcome to Finance and Fury, the Furious Friday edition Last week: Being grateful for what we have, where Australia started and where we have come Today: Luck truly running out How it can be manipulated What is luck? Success or failure apparently brought by chance...

Is Gross Output (GO) going to replace Gross Domestic Product (GDP) and are there any problems with this?

Welcome to Finance and Fury, the Say What Wednesday edition. This week the question comes from Todd. “Hi Louis, I just saw Steve Forbes talking about how Gross Output (GO) is going to replace Gross Domestic Product (GDP) as a measure of how well the economy is going?...

What is green energy and what is the future of the energy market in Australia and around the world?

Welcome to Finance and Fury, the Say what Wednesday edition. This week is another great Question from Phuong. “What do you think about the future energy plans for Australia and the world in general? I heard about the Government’s plan to build some gas station? do you...

Say What Wednesdays: Should I lock in a fixed rate on my home loan with interest rates so low?

Say What Wednesdays Should I lock in a fixed rate on my home loan with interest rates so low? Welcome to Say What Wednesdays – Where we answer your questions about personal finance and the economy! This week’s question comes from Michael. His question related to...

Gender pay gap, porn, and becoming “in demand”

Episode 1 Gender pay gap, porn and becoming "in demand" Welcome to the first episode of Finance and Fury and today we're going to be setting the scene for the rest of the podcast. The whole podcast is about helping to solve misunderstandings… and one really big one is...

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 a debt jubilee, what are the chances of this happening and how does it affect the economy?

Welcome to Finance and Fury, the Say What Wednesday edition. Part 2 from last week with Ryan’s question – Starting to look at this - What is a debt jubilee – what are the chances of this occurring and how would this affect the economy – Dates back to biblical times -...

Why work your whole life, just to have nothing left over at the end?

Episode 8 Why work your whole life, just to have nothing left over? Pay yourself first! Keep your own money – why work for others, then have nothing left to show for it? You earn more over your lifetime with this strategy – you save more and get rich right? Regular...

Pin It on Pinterest

Share This