Let’s focus on just the age component for 30 Seconds.
ABC Widget’s renewal letter arrived showing an 8.6% increase, assuming the same plan design.
But that doesn’t account for age changes.
A closer look at the rate chart shows the monthly premium for a 64 year old ($1,282.74) is roughly three times higher than for a 26 year old ($429.29). They ratchet up each year from 15 to 64 by 2-3%. Children age 1-14 are the same ($327.10) but then jump 8% at age 15 ($356.17).
Premiums are not adjusted on the birth date but at the plan’s renewal date. Since Widget’s employees all had a birthday (fancy that!) and one child turned 15, the new monthly premium was increased by an extra 2.9%. Had a 50 year old new hire replaced a 64 year old at retirement, Widget would have enjoyed a 12% decrease.
Even better, Widget just hired a chap named Ponce de Leon.
I can’t wait to deliver their renewal next year!
