Health insurance is underwritten based on a person's morbidity risk. Morbidity risk is the risk of a person becoming sick. A person's morbidity risk includes several factors and determines how the health insurance policy is issued.
Personal Factors
A person's age is a significant factor, as people are more likely to fall ill as they become older. In addition, a person's health history is considered, as this tells the insurance underwriter if a person has certain conditions that will increase their risk of becoming ill. Similarly, because some diseases are inherited, an insurance underwriter looks at a person's family history.
Lifestyle Factors
A person's occupation and hobbies are a concern if these two factors present greater than average rate of accidents or health risks. Driving history provides information about a person's driving habits, which indicate whether a person has a greater chance of getting into a motor vehicle accident. Finally, substance abuse is considered because people who abuse various substances have a greater chance of getting sick.
Financial Factors
Finances are considered as a means to determine how much health insurance a person should have. Often an insurance company specifies that a person should carry a maximum amount of health insurance that is based on their income.
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