Changes
/* Premium charged by different insurance companies for “Nicotine patch users” in different health classes */
* In the Standard Plus health class, all insurance companies except Prudential appears risk averse as their premium is on average 153% more than Prudential’s for men ($155). For women, the average premium charged is as high as 162% more than Prudential’s ($109).
* This difference seems to converge a little as we inspect the premium charges in the Standard health class which is on an average only 101% and 102% for men and women, respectively.
==Company Analysis==
[[Image:company analysis.jpg|center|600px]]
* The graphs depict the premium charges of the respective insurance company for different health classes and sub-categories based on smoking habits.
* It is noteworthy that although the companies charges less premium for women than men, but the increase in premium as the health class shifts, is higher for women than men. This is an indicative that the companies maintain a policy of risk averseness for women as their health class goes down.
===Pruco Life Insurance Co (Prudential)===
[[Image:prudential.jpg|center|600px]]
* Although Prudential charges higher premium for other categories, the charges are least for nicotine patch users.
* The premium charges for nicotine users are only '''29% higher for men''' and '''35% higher for women''' than the non-smokers in the Best and Preferred health class.
However, premium variation among smokers are as follows:
[[Image:prudential-premium.jpg|center|450px]]
* '''''For Standard Plus and Standard health class, the premium charges for Non-smokers and Nicotine patch users are same. This indicates that the company may be treating these two segments as one or at par with each other.'''''
* From the graph we find that as the health class of the Non-smoker moves from Best/Preferred health class to Standard, the premium charged increases by 29% for men and 35% for women in Standard Plus and by 62% for men and 75% for women in Standard health class. This shows that the '''''sensitivity of the company increases with the decrease in health condition and they are more sensitive to Standard health segment'''''.
* One interesting thing to note is that the company charges the same premium for both men and women who smoke for the health classes – Best, Preferred and Standard Plus. However the premium increases by 22% ( < 1 pack of cigarette ) and 25% ( > 1 pack of cigarette ) for men while for women it increases by 51% and 30%.
* '''''The highest rate differential is found in the Best and Preferred segments where the average rates between Non-smokers and Smokers (excluding nicotine patch users) differ by 181%'''''.
===Reliastar Life Insurance company (ING)===
[[Image:ING.jpg|center|600px]]
* '''''The highest rate differential is found in the Best and Preferred segments where the average rates between Non-smokers and Smokers differ by as much as 209%'''''.
===American General Life company (AIG)===
[[Image:aig.jpg|center|600px]]
'''''The highest rate differential is found in the Best and Preferred segments where the average rates between Non-smokers and Smokers differ by as much as 203%'''''.
===Genworth Life Insurance company (Genworth Financial)===
[[Image:genworth.jpg|center|600px]]
* '''''The highest rate differential is found in the Best and Preferred segments where the average rates between Non-smokers and Smokers differ by as much as 229%'''''.
===Average variation of premium for Non-Smokers across Health Classes compared to premium charged in Best Health Class===
[[Image:NS combined.jpg|center|600px]]
===Average variation of premium for Smokers across Health Classes compared to premium charged in Best Health Class===
[[Image:S combined.jpg|center|600px]]
* In AIG, monthly premium for men who smoke more than 1 pack of cigarettes a day remains constant at $413 in all health classes.
* In AIG, monthly premium for women who smoke more than 1 pack of cigarettes a day in Best health class is $219 which increases by 34% to $294 for all other health classes.
