Pricing Term Insurance in the Presence of a Family History of Breast or Ovarian Cancer |
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| Authors: | Jean Lemaire A.S.A. Ph.D. Krupa Subramanian A.S.A. Katrina Armstrong M.D. David A. Asch M.D. M.B.A. |
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| Affiliation: | 1. Insurance and Risk Management Department , University of Pennsylvania , CPC 310, 3641 Locust Walk, Philadelphia , Pennsylvania 19104-6218;2. Department of Risk, Insurance, and Healthcare Management , Temple University , 479 Ritter Annex (004-00), Philadelphia , Pennsylvania 19122;3. School of Medicine of the University of Pennsylvania , 708 Blockley, Philadelphia , Pennsylvania 19104-6021;4. School of Medicine of the University of Pennsylvania , CPC 210, 3641 Locust Walk, Philadelphia , Pennsylvania 19104-6218 |
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| Abstract: | Abstract We estimate the increased mortality and term life insurance costs for women who have a family history of breast or ovarian cancer. Using data from the medical literature on age-specific and family history-specific incidence rates, we develop double-decrement models to evaluate the actuarial impact of breast cancer and ovarian cancer in the family. We also calculate the increased mortality and term insurance costs for women who test positive for the BRCA1 or BRCA2 gene mutation. We find that the type of affected relative and her age at onset of the disease are key underwriting factors. We find substantial mortality increases (up to 100%) for women with two relatives with cancer and women with a first-degree relative who developed cancer at an early age. Mortality increases for women with the BRCA gene mutation reach 150%. While some females with a family history of cancer can be accepted at standard rates, others may need to be quoted substandard rates, depending on the underwriting policy of the company. Females with the gene mutation can possibly be accepted at a rate that incorporates a severe mortality surcharge. |
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