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Morbidity Rate

Morbidity rate is a statistical measure used by insurers and health professionals to indicate the frequency or likelihood of illness, injury, or disability within a defined population over a specific period of time. It reflects how many people in a given group are expected to experience a health-related event that may result in medical costs or lost productivity. In the insurance industry, morbidity rates are used to predict claim patterns, set premium levels, and design sustainable health and disability products.

Insurers use large-scale health data and actuarial analysis to estimate morbidity rates based on age, gender, occupation, lifestyle, and other risk factors. A higher morbidity rate indicates a greater likelihood of claims, which generally leads to higher premiums. Morbidity rates differ from mortality rates, which measure the frequency of death, as they focus on the probability of becoming ill or disabled rather than dying.

Example:

If data shows that 10 out of every 1,000 people in a specific age group experience a long-term disability each year, the morbidity rate for that group is 1 percent. Insurers use this information to calculate premiums and reserves for disability coverage.

What to Watch For:

Morbidity rates can change over time due to improvements in healthcare, changes in lifestyle habits, or shifts in workforce demographics. Understanding how morbidity affects insurance pricing helps explain why premiums may rise with age or why certain occupations have higher disability insurance costs.

Related Terms

Major Restorative

Major restorative coverage includes complex dental procedures designed to restore the function and appearance of teeth. Examples include crowns, bridges, onlays, dentures, and sometimes implants. These treatments are more extensive and expensive than basic restorative services such as fillings.

Material Facts

Material facts are the pieces of information that are essential for an insurer to accurately assess risk and decide whether to approve an application, determine premiums, or apply exclusions. These facts include any details that could influence the insurer’s decision to issue coverage or the terms of that coverage. Examples include medical conditions, medications, family health history, lifestyle habits, and participation in hazardous activities.

Medical Condition

A medical condition refers to any illness, injury, disease, disorder, or ongoing health issue that affects a person’s physical or mental well-being. In the context of insurance, the term includes both acute and chronic conditions, whether diagnosed, treated, or undiagnosed at the time of application or claim. Examples include high blood pressure, diabetes, asthma, depression, or past surgeries.

Medical Emergency

A medical emergency is a sudden and unforeseen illness, injury, or medical condition that requires immediate medical attention to prevent serious harm, disability, or death. In the context of health and travel insurance, it refers to an unexpected situation where urgent care is needed while away from home or outside your province or territory of residence.

Medically Necessary

Medically necessary describes any service, treatment, or supply required to diagnose, treat, or manage a health condition, rather than for convenience, appearance, or personal preference. Insurers use this term to determine whether a claim qualifies for payment under your policy.

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