Disability insurance for women may cost more than for men

April 18, 1994|By New York Times News Service

Women who would like to buy a disability insurance policy still have time to act before new pricing models raise their costs.

"It's not too late, but better do it now," said Richard Misrok, a consultant with the Economic Growth Group, insurance industry advisers in New York.

Saying that women have higher disability claim rates, insurers are gradually adopting new rate schedules that result in higher premiums for women than for men.

Under the new rates, virtually all women buying a policy outside a group plan will see price increases ranging from 1 percent to a whopping 50 percent. Representatives of the big four companies -- Paul Revere, Provident Life and Accident, Northwestern Mutual and UNUM -- say the younger the woman, the bigger the increase.

Premiums that differ by gender are not new in insurance, and women sometimes come out ahead. Their rates are generally lower for life and auto insurance. Disability insurance rates were based on gender until the mid-1980s, when the industry responded to various legal and legislative decisions. But now, even excluding pregnancy-related conditions, young women file the most individual disability claims and draw the most dollar benefits, said Leigh Canfield, director of individual disability product development for UNUM, in Portland, Maine.

In Maryland, a case is pending in the highest court over insurers' right to vary premiums by gender.

Pat Reuss, senior policy analyst for the NOW Legal Defense and Education Fund, said, "Insurers don't discriminate on the basis of ethnicity where there is a definite correlation with morbidity because it is socially unacceptable -- and using gender is equally indecent."

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