Is it reasonable for life insurance companies to demand that their customers try to get fit? Reasonable or not, it is already happening. John Hancock, one of the oldest life insurance companies in the US, announced last week that it would in future only write policies that offer rewards for customers who use various forms of fitness trackers or join gyms. Similar offers are available in Britain, where 1.1 million people have signed up to such schemes. It is entirely sensible that people who take out health insurance should also try to become healthier. But if the process is carried to extremes, it could undermine one of the fundamental principles of any insurance market.
Insurance works because we are ignorant of our individual fates. It is the fact that any of us might turn out to be a bad risk that makes it sensible for everyone to insure against that remote chance. The pooling of individual risks that can only be known in aggregate underlies the whole system. But there is a subtle mismatch of aims between insurers and their customers. The customers want to avoid the consequences of misfortune; the insurers want customers who avoid misfortune. The two aims are reconciled because both sides are operating behind a veil of ignorance.
Continue reading...from The Guardian https://ift.tt/2QdwOEm
No comments:
Post a Comment