spaf@gatech.CSNET (Gene Spafford) (11/29/85)
Here's some interesting information about smoking and risks. At least,
I think it is pretty interesting.
First, some background info: My wife works full-time as a
representative for a financial services company. One of the primary
products of the company is term life insurance (they do not market any
other kind of life insurance -- whole life and universal life policies
are almost always a waste of (some or most of) the customers' money).
Anyhow, her company is currently the world's largest marketer of life
insurance (all forms combined) -- they will sell more this year than #2
and #3 combined (#2 is Prudential, and #3 is New York Life; her company
is A. L. Williams).
Now the interesting fact: Kathy's company recently reduced the rates on
the policies they sell -- for NON-smokers. Someone who smokes can
continue to get insurance at the old rates. However, a non-smoker
(anyone who has not smoked in the last 12 months) can buy almost a
third again more coverage in a policy for the same amount of premium
(Kathy figured this on a 35 year old male buying $50K insurance on a 15
year level term policy, your actual mileage may vary).
The insurance company is surely not going to do something to lose
money. With almost $60 billion worth of policies issued (that's only
for A.L. Williams, and only this year to date), it would be a grave
mistake to do something like this unless there was economic sense to
it. The tobacco companies may claim that there is no scientific proof
that smoking is harmful to health, but the insurance actuaries are
willing to wager cold, hard cash that if you smoke, your beneficiaries
are more likely to collect on your life insurance in the next 15
years.
Besides the obvious bias in favor of non-smokers, I think the most
interesting part of this is that they make no distinction between
someone who has never smoked, and someone who has quit for at least a
year.
--
Gene "wedding done, thesis to go" Spafford
The Clouds Project, School of ICS, Georgia Tech, Atlanta GA 30332
CSNet: Spaf @ GATech ARPA: Spaf%GATech.CSNet @ Relay.CS.NET
uucp: ...!{akgua,decvax,hplabs,ihnp4,linus,seismo,ulysses}!gatech!spafabc@brl-sem.ARPA (Brint Cooper ) (11/30/85)
Giving a premium break to non-smokers sounds like a good
idea. How does Kathy's company assure themselves that the
applicant simply isn't a lying smoker looking for a bargain?
--
Brint Cooper
ARPA: abc@brl.arpa
UUCP: ...{seismo,decvax,cbosgd}!brl-tgr!abcspaf@gatech.CSNET (Gene Spafford) (12/06/85)
In article <572@brl-sem.ARPA> abc@brl-sem.UUCP (Brint Cooper (SECAD/CSMB) <abc>) writes: >Giving a premium break to non-smokers sounds like a good >idea. How does Kathy's company assure themselves that the >applicant simply isn't a lying smoker looking for a bargain? Lying on an insurance application is sufficient grounds for the insurance company to not pay the claim should the applicant die (and the lie be discovered -- and that's a good possibility if the death is smoking related), just as if the applicant doesn't disclose a heart condition or cancer when applying for the policy. Also, the agent involved can usually find out if the person is a smoker. Instances of cheating are probably very, very small. Kathy has said that it is more likely that someone will lie about his/her medical history rather than whether s/he smokes or not. -- Gene "wedding done, thesis to go" Spafford The Clouds Project, School of ICS, Georgia Tech, Atlanta GA 30332 CSNet: Spaf @ GATech ARPA: Spaf%GATech.CSNet @ Relay.CS.NET uucp: ...!{akgua,decvax,hplabs,ihnp4,linus,seismo,ulysses}!gatech!spaf