I had recently conducted a simple poll asking if the premium for Careshield Life should be the same regardless of gender. There were a total of 61 votes. While the poll result maybe not be accurate due to the same numbers of replies, I hope it can still give a fair view of the masses.
Majority think that the premium should not be equal because statistically a female has a higher chance of claim and they tend to live longer so the premium should be higher than a male assuming both are of the same age.
Among those who think that the premium should be equalized, the common reason are the scheme is mandatory. With that, there is no anti-selection as all the risks are pooled, not simply by gender.
What is more interesting is the result of the gender who had voted.
The difference in premium between gender is a common practice but is this premium difference are actuarially calculated or just gender-biased? Let us look as the premium of a 25 years term plan with Death and Critical Illness benefit of a male and female from a local insurance company. Both are 30 years of age and the coverage is $100,000. It will cost the male $255 annually and the female $251.
What if it is a term with only death benefit? It will cost the male $125 annually and the Female at only $107.
My point here is while some felt that the longer mortality is a disadvantage when it comes to a long term care plan like Eldershield or Careshield Life, the same reason is an advantage when it comes to a plan that covers death because female live longer and the probability of a death is lower than a male of the same age.
Some had commented having female to pay more for Careshield Life is penalizing them. As much as I believe in gender equality, there are cases like this which I felt we cannot have that as a basis of premium calculation. Similarly, there are studies to show an elderly 80 year old person has a higher chance of hospitalization than a 20 year old man thus it will cost the elderly $1,1,75 per year for his Medishield Life and that young man requires only $130! I don’t think anyone is discriminating the elderly or penalizing them for being old. Neither it is fair to have a equalised premium for age group in such cases. However, do note that for medical plans, the premium is usually age-band than gender base because there is no figures to prove any gender is likely to be hospitalized more than the other.
If you are interested in reading more on this topic, you can have a look at Equal CareShield Life Premiums For Men And Women: Does It Really Make Sense?