563 Assignment 10 CT

Health Risk Assessment

Insurers in Saudi Arabia use Health Risk Assessment to evaluate individual’s health and lifestyle which enable them to determine the potential risk posed by an applicant. They then determine how much the policy-holder should pay in premiums based on the level of risk. Policyholders with higher risks pay more premiums than those with lower risks. It is because they have an increased probability of disability or death due to aspects of their health or lifestyle. They include individuals with lifestyle habits such as taking alcohol or smoking, persons with pre-existing medical conditions such as stroke or heart attack, and those involved in activities, occupations, or sports that are dangerous (Zietz, 2013).

Factors Influence the level of Risk

During the application process of the life insurance, the policy provider gathers as much information as possible about the applicants in order to set his premiums accordingly. The main details that would be included in the survey format include:

a) Pre-existing Conditions

In this field including questions (1-2), the applicants would be required to disclose any past or existing conditions that they may have suffered as well as provide full information about any treatment they have had or are currently undergoing. Pre-existing conditions may be handled in any of the following ways: decline to insure the applicant, cover the condition but charge the policyholder higher premiums, or offer a policy that does not cover the pre-existing condition. The applicants are required to disclose all the relevant information and failure to do so may lead to rejection of a future claim or cancellation of the policy without refund. This assessment is important since it will enable the provider to analyze all the conditions and be certain about the health status and wellbeing of the applicant (Zietz, 2013).

B) Lifestyle Patterns lead to Illness

In this section including questions (3-4-5), the applicant would be required to provide details about his lifestyle factors such as alcohol consumption and other drug use as well as any prescriptions or medications that he is using regularly. It is significant in determining how much the policyholder should pay in premiums. Lifestyle factors that increase the chances of higher medical costs, disability or death are directly related to higher premiums while those factors that lead to a healthy lifestyle may attract reduced premiums, discounts, and other bonuses offered by the insurer (Sturm, 2012).

C) History of Physician Visitation

Questions (6-7) showing Understanding an applicant’s history of physician visitation is important for the insurer to assess the chances of the applicant to develop certain diseases. The cost of insurance premiums is based on the level of risk. An applicant who has experienced medical problems in the past poses an increased risk to the insurer and as a result, he will have to pay more for his premiums (Simone, 2008).

D) Other Issues Impact Risk Assessment and Healthcare Costs of Individuals

This section including questions (8-9), is important in determining how responsible the applicant is in taking care of his health and wellness. Individuals who are responsible for their wellness live healthy lifestyles where they eat healthy food and do exercises regularly. Such individuals would rarely develop health problems; hence their healthcare costs are low. It is unlike individuals who take fast food rich in sugar and fat such as fried chicken, chips, snacks, and sugar sweetened beverages that may cause health problems such as obesity and diabetes. These individuals are likely to have frequent health problems, hence their healthcare costs are high (Beenstock, Dickinson & Khajuria, 2011).

Health Risk Assessment Questionnaire

For each question, (please choose where applicable):

1. What medical conditions have you had in the past?

· Asthma

· Heart failure

· Diabetes

· Stroke

· Hypertension

· Others

· Not applicable

2. Which of the following diseases are you currently receiving treatment?

· Asthma

· Heart failure

· Diabetes

· Stroke

· Hypertension

· Others

· Not applicable

3. Do you take alcohol?

· Yes

· No

4. How often do you smoke or use any tobacco products? (Cigars, snuff, chew, cigarettes)

· Daily

· Longer than a week

· Longer than a month

5. Are you abusing any medication or using street drugs?

· Yes

· No

6. How often do you visit a doctor?

· Weekly

· Monthly

· As needed

· Rarely

7. How many times have you visited a hospital and had unplanned overnight stay as a patient?

· 0

· 1

· 2

· 3 or more

8. I am ultimately responsible for taking care of my health and wellness

· Strongly disagree

· Disagree

· Agree

· Strongly agree

9. I take an active role to ensure my body is healthy and fit

· Yes

· No

References

Beenstock, M., Dickinson, G., & Khajuria, S. (2011). The determination of life premiums: An international cross-section analysis 1970–1981. Insurance: Mathematics and Economics, 5(4), 261-270.

Simone, C. B. (2008). Method and apparatus for lifestyle risk evaluation and insurability determination." U.S. Patent 7,319,970, issued January 15, 2008.

Sturm, R. (2012). The effects of obesity, smoking, and drinking on medical problems and costs. Health affairs, 21(2), 245-253.

Zietz, E. N. (2013). An examination of the demand for life insurance. Risk Management and Insurance Review, 6(2), 159-191.