The Real Reason Women’s Disability Premiums are Pricey

Author: Emma Gardner

Today, we’re going to tackle a troublesome topic for female physicians. If you’re new here, buckle up. 

Fact: Disability insurance is significantly more expensive for women. 

Why, you may ask? Let’s get into it. 

Women In Medicine

Before we start, let’s give some background and recognition for how far women have come in the field of medicine. In the year of 1970, only 5% of all physicians were female.  Today, women make up 36.3% of all physicians, 45% of all residents and fellows, and over half of med-school graduates are, you guessed it, female. 

For all the number-oriented girls out there (we exist), if we translate this data in terms of percent change, that means the number of female physicians has increased by a whopping 626% in the past 50 years!

Why does Disability Insurance Cost More for Women?

At a glance, it’s puzzling why disability insurance would cost more for women than it does for men. Stereotypically, women take fewer risks than men. In general, we’re more intuitive, more cautious, and usually more responsible than our male counterparts. You’d think all of those attributes would lend us to lower costing premiums. After all, it does for life insurance! However, for disability insurance, it’s quite the opposite. 

Unfortunately, our personal responsibility is actually what increases our costs. 

Premium rates are decided by actuaries, and actuaries use disability claim statistics to determine the rates that insurers provide us. 

How does this all tie together? Well, females are more likely to go to the doctor when something is wrong. Females, overall, are more likely to actually utilize their healthcare. Naturally, this results in more records of female claims, inflating the statistics to suggest that females have more risk of disability than men, despite the likely odds that men are under-representing themselves. 

But, the fact of the matter is…we are at a higher risk, and the price differential is not as sexist as it sounds. 

The bottom line is, women do have a higher chance of becoming disabled, and generally our disabilities last longer than mens’. This is for a variety of reasons, but the most common include that women are more likely to develop autoimmune disorders such as Lupus, Graves, chronic fatigue, multiple sclerosis, and inflammatory bowel disease. We are also more prone to mental health disorders such as anxiety and depression. The leading causes for these issues in women are more intrinsic to our biology when compared to men, especially due to premenstrual/pregnancy conditions and postpartum disorders. 

All in all, our anatomy poses more risk for disability when compared to men, thanks to our reproductive organs. As a woman, you are susceptible to breast cancer, ovarian cysts, endometriosis, ovarian or cervical cancer, pregnancy complications, and the list goes on. If these conditions become serious enough, they could require surgery such as a mastectomy, hysterectomy, or various other reproductive surgeries that could leave you out of work for a minute. Despite all the faith we have in our healthcare heroes, any time the word “surgery” enters the discussion, the amount of risk increases in the eyes of actuaries. 

Pregnancy and Premiums

To piggy-back off of that, another reason our premiums as women are more expensive is because women have higher rates of pregnancy and childbirth than men. Shocking, I know. Pregnancy claims make up over 22% of all short-term disability claims. And guess what? 100% of those claims are made by women. Why? To state the obvious, women are the individuals who risk the wellbeing of their own bodies to make the miracle of childbirth possible, and complications are inevitable. Oftentimes, complications will lead to limitations or exclusions on your policy. Your policy should cover a “normal” pregnancy. However, your definition of normal and theirs is likely different. Anything outside of vaginal delivery will likely be considered abnormal and not natural. If you undergo a C-section, which again, is not considered a “normal” birth, it’s likely that it will be excluded from your coverage as well. 

Don’t take this the wrong way, because C-sections are totally normal. In fact, in 2020, over 30% of deliveries were cesarean. But, we’re thinking like actuaries today in order to understand this price differential. Which poses more risk from an insurance standpoint, vaginal delivery or cesarean delivery? Definitely the one that requires surgery. Now, don’t even get me started on in vitro.

It’s not uncommon for women in medicine to freeze their eggs to later undergo in vitro fertilization. Becoming a doctor is no easy task, and as you know, most women in medicine dedicate their fertile years to their career. The stress, seemingly endless hours of work, and lack of sleep are not to be underestimated when it comes to their effect on fertility. Even if you are still in your childbearing years when you exit training, one in four female physicians struggle carrying a baby to term, which is almost double the national average. When actuaries see a record of egg preservation, they see it as a red flag. Even if you are 25 and perfectly fertile, you’re likely to get an exclusion on your policy when it comes to childbirth, as it will require a medical procedure when you do decide to get pregnant, which is not “normal” and equates to risk. 

Structural Sexism in Disability Insurance?

Now that we know the rationale behind the higher costs, let’s look at the premiums themselves. Reports indicate females’ overall risk of long-term disability is roughly 22% higher than males’. 

So, we’re predisposed to 22% higher risk, but our premiums cost 40-60% more on average. Hmmm. Not only do the percentages not add up, but this feels like an inequality because our higher risk is purely biological and something we have absolutely no control over. 

We can’t argue with statistics. If you identify as a smoker, you will have a higher risk of disability, and it makes sense for that to be reflected in your premium costs. You’re choosing to smoke when you know it poses dangerous and adverse health effects! The dilemma here arises from the fact that the amount of risk women pose is inaccurately reflected in the cost of their premiums, and we have no way to diminish that risk because it’s written into our anatomy. 

As a Woman, What’s Your Best Plan of Attack?

At this point, you might be feeling a little discouraged, which is completely justified and valid. You might be thinking, “To heck with insurers and their unequal premiums, I won’t give them any of my money!” But, that would completely undermine everything you’ve worked so hard to achieve. Here’s our advice for you.

Apply for disability insurance NOW, long before you even think about having children. If you apply while you’re pregnant, you’ll likely get an exclusion on your policy which dictates that the insurer isn’t liable to pay for any complication that results from the pregnancy. It’s incredibly important to apply for coverage before you make plans to start a family, so that way if you do end up with a disabling complication, it’s covered. 

Try to find a uni-sex policy. Uni-sex policies essentially eliminate the price gap, giving the same rates to both men and women, and virtually cutting the costs of your premium in half. Unfortunately, these rates are getting harder and harder to come by. Unisex rates are only available in certain states nowadays. Lucky for you, our agents know which states! Be sure to ask your agent if your state requires unisex rates–they’ll be happy to help you save some money. 

Pay attention to legislation that is being proposed in your state. Take a look at those running in your local elections, and see if any representatives support the reimplementation of unisex rates in the world of disability insurance. Go vote for them if you feel so inclined!

Women are earning more than ever before. For most women, losing all your income would be devastating to your livelihood and/or your family. Please do not let frustration at the inequality of premium rates discourage you from buying a disability insurance policy! You’ve worked hard to get to where you are now, and so have all the female trailblazers that came before you. It would be a dishonor to the years of progress made by women’s rights activists if you took the risk of NOT buying a disability policy, only to become disabled later in life and lose everything. 

Get in touch with Pattern today, and we’ll help you find the best rate and the best price, with every discount out there. Request your quote now!

About the author: Emma Gardner is a content coordinator at Pattern. In between teaching composition and literature as a graduate assistant, Emma researches trends and updates in the disability insurance market. Her work aims to increase insurance literacy and help physicians make informed financial decisions.