Morbidity
Morbidity refers to the incidence of illness or disease within a population, used by insurance companies to predict the likelihood of disability claims and to calculate health and disability insurance premiums.
Exam Tip
Morbidity = SICKNESS rate (health/disability). Mortality = DEATH rate (life insurance). Remember: Morbidity has an "i" like "illness."
What is Morbidity?
Morbidity measures the rate of illness, disease, or disability in a population. Insurance companies use morbidity statistics to predict how likely policyholders are to become sick or disabled, which helps determine premium rates for health and disability insurance.
Morbidity vs. Mortality
| Concept | Measures | Insurance Use |
|---|---|---|
| Morbidity | Sickness/disability rate | Health, disability premiums |
| Mortality | Death rate | Life insurance premiums |
Morbidity Rates
| Metric | Description |
|---|---|
| Incidence Rate | New cases in a period |
| Prevalence Rate | Total cases at a point in time |
| Attack Rate | Cases during outbreak |
| Disability Days | Days unable to work |
Factors Affecting Morbidity
| Factor | Impact |
|---|---|
| Age | Higher morbidity with age |
| Occupation | Risky jobs = higher morbidity |
| Lifestyle | Smoking, obesity increase risk |
| Gender | Differences in certain conditions |
| Location | Geographic health variations |
Insurance Applications
| Use | Description |
|---|---|
| Underwriting | Assess individual risk |
| Pricing | Set premium rates |
| Reserves | Calculate claim reserves |
| Product Design | Define coverage terms |
Morbidity Tables
Similar to mortality tables for life insurance:
- Based on large population studies
- Show probability of disability by age
- Used to calculate disability insurance costs
- Updated periodically with new data
Morbidity Risk Factors
| Risk Factor | Example |
|---|---|
| Chronic Conditions | Diabetes, heart disease |
| Mental Health | Depression, anxiety |
| Musculoskeletal | Back problems, arthritis |
| Occupational Hazards | Physical labor injuries |
Impact on Premiums
| Morbidity Level | Premium Impact |
|---|---|
| Low Risk | Lower premiums |
| Average Risk | Standard premiums |
| High Risk | Higher premiums or declined |
Study This Term In
Related Terms
Mortality Table
InsuranceA mortality table is a statistical chart showing the probability of death at each age, used by life insurance companies to calculate premiums, reserves, and the expected length of life for policyholders.
Underwriting
InsuranceUnderwriting is the process by which an insurance company evaluates risk and determines whether to accept an application for coverage and at what premium rate.
Disability Insurance
InsuranceDisability insurance provides income replacement when a policyholder cannot work due to illness or injury, typically paying 60-70% of pre-disability income after an elimination period.
Premium (Insurance)
InsuranceAn insurance premium is the amount paid by the policyholder to the insurance company for coverage, typically paid monthly, quarterly, or annually.