Minor point but how does Free Cover on the above work? With CI/IP there's a SA limit and that's the Free Cover Limit. How do they illustrate this with Group PMI? (September'08 Q1) Also, are the only rating factors for indiv. PMI: age, region, medical underwriting? Thanks
I asked the same question about free cover on PMI and the Sept 2008 exam. See under SA1 exam posts for a couple of replies. I think your understanding of traditional PMI rating factors is correct (although I don't work in GI so am open to corrections). I think that there are some new PMI products on the market which are trying to use things like smoker status, sex and BMI for rating but these are still in their early stages so are not yet market practice.
Spot on LucyLou! For thread on free cover on group PMI see: http://www.acted.co.uk/forums/showthread.php?t=2452 For indiv rating factors, yes traditionally very few rating factors used. Some insurers still use traditional approach. AXA PPP and BUPA now provide a "personalised" quote, so are likely to use more rating factors these days. Exeter Friendly has just launched a new plan that is "unusual" in offerring discounts for low BMI and smokers. Key for actuaries is collect data on lots of factors, then decide later whether to reflect all of them in the premium (or to have cross-subsidies). Cheers
