Co-Founder, Coastal Financial Partners Group, California
On average, women have a longer life expectancy. The longer one is expected to live, the less the life insurance rate will be based on a level premium paid for life.
Insurance companies start with average rates based on gender, age and tobacco use and then underwrite individually to come up with a price based on those rates which may be better than average (preferred) or below average (substandard or rated).
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
Life insurance is cheaper for women because statistics over time have proven women as a group tend to live longer than males as a group. Pricing is lower because "risk" is spread out over a longer period of time. In a reverse, women cost more for health insurance (where it's allowed) because they are bigger users of healthcare than men. Maybe the reason women live longer.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
There is a branch of mathematics called, actuarial science. Actuaries pour through the records of millions of deaths and try to identify anything that makes a difference from average. One of the early findings was that in a given year women were less likely to die than men. That resulted in the rating that you now see. There is some indication that the trend is towards less of a difference, however, only time will tell.
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Insurance companies start with average rates based on gender, age and tobacco use and then underwrite individually to come up with a price based on those rates which may be better than average (preferred) or below average (substandard or rated).