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In a market where product providers are allowed to make up their own minds about whether or not to use sex distinct or unisex rates there will be winners and losers. As I mentioned, in MT where unisex life insurance rates are offered, females pay more than males for insurance. If a company was allowed to go into MT and price males differently than females, they would quickly gain most of the female market as they would have a big price advantage over unisex priced products. That would leave only the males buying the blended priced products, and the companies selling them would not have many females in their product mix.
Of course, as noted earlier, the opposite would be the case in the pension market, where females would get less benefits than males because they live longer and companies would have to pay pension benefits longer. Unisex pricing would get all the female pension business.
We witnessed similar things when the life insurance market adopted non-smoker versus smoker rates. At one time smokers and non-smokers all paid the same amount. But once companies decided to make a distinction, those that still blended their premiums were losing non-smokers to the new non-smoking products, and only getting smokers buying their blended rates. The reality forced everyone to move away from the blended pricing.
In a competitive and free market, that is why I believe unisex pricing can only be implemented if it is imposed by regulation as is happening in MT.
Of course, as noted earlier, the opposite would be the case in the pension market, where females would get less benefits than males because they live longer and companies would have to pay pension benefits longer. Unisex pricing would get all the female pension business.
We witnessed similar things when the life insurance market adopted non-smoker versus smoker rates. At one time smokers and non-smokers all paid the same amount. But once companies decided to make a distinction, those that still blended their premiums were losing non-smokers to the new non-smoking products, and only getting smokers buying their blended rates. The reality forced everyone to move away from the blended pricing.
In a competitive and free market, that is why I believe unisex pricing can only be implemented if it is imposed by regulation as is happening in MT.
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