The Cost Of Health Insurance

Determining the price of health insurance is a more difficult and complex process than that for life insurance. There are many types and varieties of health insurance, such as hospital, medical, disability income, and accidental death. The statistics used to compute the price are not always reliable and are subject to many interpretations depending, for example, on how an insurer defines disability and settles claims. Third, the measurement of expected claim costs is complex because the insurer must deal with both the expected severity of claims as well as their frequency. Nevertheless, an understanding of the general process is helpful in explaining the tremendous increases in health insurance costs during the past decade.