Will Bio-Metrics Make Term insurance premiums increase?
There’s been a lot of traffic about life insurance carriers possibly using a photo of you to initially assess your health for rate class purposes. I first saw this on Facebook in early April. Since then, major news sources have quoted this article and it’s gone viral. I’ve pasted it below.
The use of bio-metric information for initial screening is vital for the insurance company. They must assess, or “underwrite” each applicant for a policy in order to determine the appropriate rate class. Just how far they go to do this has been the subject of debate in professional circles recently. With the advent of genetic testing for the masses such as 23andme and others makes me wonder if the insurance companies will be willing to break the bio-ethics barrier and use family genetics to further screen in order to clean up their books of business and cherry-pick their risks more than they do already.
Don’t get me wrong, life insurance companies need health screens, but they also need to balance any profit motive with a societal benefit. Life insurance is a VITAL CORNERSTONE of any financial plan. I believe that further restricting access to affordable policies is not in the best interest of the consumer. Life expectancy is increasing and as that happens, insurers are able to stretch out the years of premium payments on policies, so premium actually get CHEAPER over the years. If the industry incorporates genetic testing or “selfie” assessments or whatever, then their applicant pools could end up shrinking which would cause premiums to increase. Life insurance experience, after all, is based on “the law of large numbers” which helps actuaries predict future claims experience. Let’s make sure that we keep the applicant pools as large as possible by NOT using selfies and genetic testing.
As always, I welcome your comments on this issue or any other financial matter. Please share this content with anyone you care about, and by all means, use our term life insurance quote engine to see how inexpensive it is to protect those you love! Thanks for reading and the article is below:
Be Careful With Those Selfies on Social Media!
Selfies have become exceptionally commonplace, but these self-portraits may soon have an impact on life insurance premiums. In fact, as facial recognition and analysis technology continues to improve, it may one day determine whether or not someone even qualifies for a policy.
The various details picked up by a selfie, such as drooping skin, fine lines and wrinkles, contours and even dark spots can be indicators of aging. When combined with other data, it may help insurers to calculate life insurance premiums or even whether or not they want to cover someone at all.
Lapetus Solutions co-founder and chief data scientist, Karl Ricanek Jr. explained that “Your face is something you wear all your life, and it tells a very unique story about you.” Data about your face can be viewed and potentially collected and analyzed to learn about a person’s present wellness as well as how it is maintained over time.
As a result, several insurers are testing technology to use selfies to affect life insurance premiums.
These life insurance companies are looking into the way Lapetus technology can use data combined with facial analytics to estimate a person’s life expectancy, said Ricanek. At the time this article was written, Ricanek declined to reveal the names of the insurance companies testing the Lapetus technology products.
Life expectancy estimates are a vital component of insurer decision making in terms of approval and pricing determinations. Chronos, the Lapetus product, would make it possible for a consumer to purchase life insurance without having to undergo a medical examination, said Ricanek.
Insurance providers already use a range of other forms of information – with the consumer’s permission – in order to create a more complete picture of their life expectancy. This goes well beyond the information provided within the initial application form. For instance, life insurance premiums can also be based on data from motor vehicle records, insurance industry database reports and prescription drug history. Selfies would only be the latest addition to the mix.