Thursday, September 25, 2008

Political Insurance

We are not a poli-blog (political blog), but occasionally politics intrudes on insurance.
Or insurance intrudes on politics:
In health insurance (which is probably the most common subject on which we post), risk is based on morbidity: the chances that one will become ill or injured. Life insurance risk is predicated on something called mortality: the chances that someone will die in a specified period of time. Thus we have "mortality tables;" essentially spreadsheets that presume that a certain number of people will die at a certain age, or how long folks of a certain age are likely to live.
Given that one of the contenders for President of these United States is 72 years old, and has had previous brushes with cancer, it seems relevant to ask whether that person is likely to die while in office (of course, there's a 100% chance that any person will die, eventually).
It's said that the difference between an extroverted accountant and an extroverted actuary is that the actuary, as he walks along, looks at other people's feet. In the event, an actuary's job is to help the insurance company "evaluate the likelihood of events and quantify the contingent outcomes in order to minimize losses, both emotional and financial, associated with uncertain undesirable events." These folks enable the insurer to appropriately "price the risk."
Since the younger candidate has a history of smoking (and, of course, inhaling), there is some question about his expected health, as well. Most life insurers charge much higher premiums for smokers than non-, a reflection of the increased risk of that person dying "on the company's dime."
The good news is that, health histories notwithstanding, it appears that neither candidate is likely to die (of natural causes) while in office. Since an actuary literally puts the insurance company's money where his (or her) own mouth is, that seems pretty final.
Oh, probably need to find a better way to put that.
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