Have you noticed that when you buy health insurance, they will ask for your age and gender? Many of us understand that health insurance is more expensive when we get older. So the older you are the more expensive the insurance is. But why does gender matter? Why is there a price difference between men and women?
It brings us back to the very basic fundamentals of insurance. Insurance is all about managing risk. Which means, it really boils down to how much risk can an insurance company afford on something— or in this case — someone.
To illustrate the difference, we take a look at the premium difference between men and women in HLA’s Major Medi.
The premiums for men from age 0 – 50 is lower than women in the same age group. For example, at age 36 a woman’s premium is RM 524.45 (plan MM200) which is RM 63 more than a male’s premium who is in the same age group.
If we look beyond the age of 50, the premium for men is higher than women’s while the premium for women becomes lower than the men’s. And this continues up until the age of 99.
Why is there this price difference between men and women?
Of course, insurance companies have a good reason for this.
Lifestyle and Life Expectancy in Malaysia
Generally, in Malaysia illnesses tend to appear in women more than men. Younger women will go through child bearing stages in their lives which can plague women with a number of complications hence the high premiums in a woman’s early years in life.
But child bearing is not the only reason. Women also have different risks of diseases or illnesses that men don’t such as breast cancer and cervical cancer.
However, as men grow older — beyond 50 years old, they suffer from cardiovascular and other lifestyle diseases more than women.
The cardiovascular diseases that occur among Malaysians are partly due to the lack of quality in their lifestyle such as bad nutrition and not living actively on a daily basis.
Aside from lifestyle, the average life expectancy between men and women in Malaysia plays a role for insurance companies to determine premiums in health policies too. Life expectancy means how long is a person in Malaysia expected to live.
Malaysia recorded a rise in life expectancy. In 2016, a newborn baby boy can expect to live up to 72.6 years old while a newborn baby girl can expect to live up to 77.2 years.
In Malaysia, some insurance companies differentiate premiums by gender while other insurance companies such as Tokio Marine rate premiums by age. Given Malaysia’s health profile, a gender based pricing in health insurance policy helps insurance companies set premiums that reflect our risks, claims, and costs.
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