Factors Affecting Rates
1. Type of business: Heavy manual labour businesses have different claim histories than businesses that are white collar.
2. Occupations: Certain occupations have a higher incidence of claim than others.
3. Locations: The locations of your employees will affect certain rates. People in some areas of the country live longer, and rates can reflect this.
4. Ages: The older the average age of your group, the higher the average rates will be. A small group that hires one older individual may see a drastic effect on the life and disability renewal rates, as there will be a greater affect on the average than with a larger group.
5. Sex: Historically, females live longer, but are more often disabled. Therefore, the more females in your group, the lower the life insurance rate, but the higher the disability rates, all other things being equal.
6. Unisex rates: In areas where unisex rates are requested, the rates for males and females are averaged for each age. The results are that the average rates for life insurance for an all-male group will decrease, and they will increase for disability. The average rates for all-female groups will be the reverse.
7. Taxation changes: Any change in taxation will be immedately reflected in the rates; for example, if the "hidden" provincial tax is increased.
8. Claims experience of the group: The group's claims experience is one of the biggest factors on the rates. Having one, two or more people on prescription drugs for medical problems such as heart disease, Parkinson's disease, or diabetes, etc., can drive up the EHC rates, depending on group size, and past experience.
9. Benefit design: Having a so-called "Cadillac" plan, one which covers everythihg at 100 per cent with no deductibles, will increase the chances of paying higher rates, as more things are covered.
10. Government cutbacks: For people used to having everything paid for by the government, any cutbacks by that sector will put pressure on "Medicare supplement" group insurance benefits to pick up the difference. Insurers are often very willing to do this, for the "appropriate adjustment in the rates".
11. Insurer experience: An insurance company which experiences difficulties with one particular business in one location may extend this experience to others in that business sector. For example, if an insurer loses money on one meat packing plant, it will be less generous when quoting on the next one.
12. Size of premium: Volume discounts, or lower retention rates, are based on the size of the premiums; the larger the premium, the greater the "discount".
13. Inflation: Inflation causes the costs of administration and insurer overhead to rise, which in turn is reflected in the rates.
14. Trend: Medical practitioners and dentists are constantly finding new ways, better wasy and hence more expensive ways to do procedures. This, plus "inflation" in the costs of these goods and services is known as the "trend".
15. Hiring practices: Hire poorly or hire well; rates will reflect hiring practices.
16. Safety practices: Safety pays by reducing the number of benefit claims.
17. Corporate environment: High stress environments lead to higher claims. Poor management leads to higher stress levels.
18. Pre-employment medical examinations: Can assist an organization to hire the most physically fit people. These medicals can become politically sensitive.
19. Employee/Family Assistance Plans: Offer counselling to employers, employees and dependants for a wide range of personal problem situations. Although difficult to quantify, organisations installing EFAPs have found that other benefit costs may drop and more importantly, individual productivity has generally increased for individuals using these services.
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