Morbidity

What Does Morbidity Mean?

Morbidity refers to the rate at which disease occurs within a group of people over a specific period of time.

Actuaries often use morbidity rates to determine the pricing of various insurance policies, such as life insurance, health insurance, and long-term care insurance. That’s one reason health and life insurers look closely at an applicant’s health history when setting rates, alongside the other factors that impact life insurance premium costs.

Insuranceopedia Explains Morbidity

Many diseases can trigger an insurance payout. For example, an insurer may need to pay health insurance benefits to a policyholder who becomes ill and requires medical treatment, or a terminal illness might result in a death benefit payout. As a result, insurers use morbidity rates to assess the likelihood of claims and adjust their premiums to offset the associated insurance risk. This is why pre-existing conditions weigh so heavily in underwriting, and why people with ongoing health issues often look specifically for life insurance for chronic illnesses.

A morbidity table is one of the tools commonly used to calculate morbidity rates.