As a group, young male drivers cause more automobile insurance losses than young female drivers. A few states, however, no longer allow automobile insurers to charge different rates for males and females. Similarly, over a decade ago, the Supreme Court ruled that employers using annuities to fund retirement benefits could no longer collect higher contributions from women, who were expected to live longer than men, in order to make equal annuity payments during retirement.

Should life insurance rates be made gender neutral as well? In the past two decades, the gender mortality gap has begun to close. While female longevity has risen, male life spans have increased at a faster rate, due in part to medical advances in treating conditions like heart disease, which traditionally kills more men than women. Many insurers, however, still base their insurance rates on actuarial data from the 1970s. Because of AIDS and the uncertainties that accompanied it, insurers were reluctant to use data from the 1980s. Only recently have companies begun to incorporate data from the early 1990s. Yet even with a smaller gap between mens and womens longevity, insurance rates for women are still lower than for equally aged and healthy men.

Questions for Discussion:

1. Is it ethical for life insurers to charge different rates for men and women? If it is not legal to charge different rates based on race, why should gender be different?

2. Does this practice represent unreasonable discrimination (sometimes called social inequity) against males based on a factor over which they have no control?

3. Given the possibility that the gap between male and female mortality may close during the next few decades, is it really fair to charge different rates to men and women for a policy that runs twenty, thirty, or more years?

Here are some sample online insurance quotes.

Monthly Premium for a 10-year Level Term Life Insurance Policy:

Coverage Age Gender Premium $100,000 25 Male $7.06 $200,000 25 Male $9.80 $500,000 25 Male $14.17 $100,000 35 Male $7.09 $200,000 35 Male $9.80 $500,000 35 Male $14.58

$100,000 25 Female $6.46 $200,000 25 Female $8.67 $500,000 25 Female $12.08 $100,000 35 Female $6.56 $200,000 35 Female $8.75 $500,000 35 Female $12.08