What is the 'Morbidity Rate'

The morbidity rate is the frequency with which a disease appears in a population. Morbidity rates are used in actuarial professions, such as health insurance, life insurance and long-term care insurance, to determine the correct premiums to charge to customers. Morbidity rates help insurers predict the likelihood that an insured will contract or develop any number of specified diseases.

BREAKING DOWN 'Morbidity Rate'

The ability to accurately predict how many customers will get sick and what diseases they will get sick with helps insurers predict how much money they will spend to provide treatment for insurance customers. Thus, accurate morbidity rates are crucial for keeping insurance companies in business. Morbidity rate should not be confused with mortality rate, which is the frequency of death in a given population.

RELATED TERMS
  1. Bureau Rate

    A standard price per unit of insurance set by a state's insurance ...
  2. Personal Lines Insurance

    Property and casualty insurance products for individuals that ...
  3. Annual Renewable Term (ART) Insurance

    A form of term life insurance that offers a guarantee of future ...
  4. Total Insurable Value

    Total insurable value is the value of property, inventory, equipment, ...
  5. Insurance Proceeds

    The benefit proceeds paid out by any type of insurance policy ...
  6. Key Person Insurance

    A life insurance policy that a company purchases on a key executive's ...
Related Articles
  1. Insurance

    When Life Insurance Isn't Worth It

    So, you're thinking about buying life insurance, but do you really need it?
  2. Insurance

    Explaining Insurance

    Insurance is a form of contract between an individual and an insurance company that spreads risk in exchange for premium payments.
  3. Insurance

    Bundle Your Insurance For Big Savings

    Bundling your insurance can save you money and time. Read on to see how get the most out of multiline insurance discounts.
  4. Insurance

    Understanding Your Insurance Contract

    Learn how to read one of the most important documents you own.
  5. Insurance

    What Happens If Your Insurance Company Goes Bankrupt?

    When insurance companies go bankrupt or face financial difficulty, it's bad news for policy holders.
  6. Insurance

    4 Things That Keep You From Getting Life Insurance

    We look at four common reasons people give for not applying for life insurance, and see if they're legitimate.
  7. Insurance

    For Life Insurers, Making Money Is A Numbers Game

    Life insurance is a data-driven industry that relies on complex financial models to predict future expenses and income from premiums and investments.
  8. Insurance

    12 Insurance Questions for High Net Worth Families

    High net worth families should ask themselves these 12 questions regarding comprehensive insurance.
RELATED FAQS
  1. What is the average return on total revenue for the insurance sector?

    Learn about the three main segments of the insurance industry, and find out what the average return on revenues is for the ... Read Answer >>
  2. What are some examples of when insurance bundling is a bad idea?

    Learn about situations where insurance bundling may not be a favorable option. Bundling insurance is often a good idea, but ... Read Answer >>
  3. What are examples of the largest companies in the insurance sector?

    Read about some of the largest and most influential companies in the insurance sector, a list that includes Berkshire Hathaway ... Read Answer >>
  4. What are the main factors that impact share prices in the insurance sector?

    Learn about some of the main factors that impact share prices in the insurance sector. Insurance companies make money by ... Read Answer >>
  5. What is the usual profit margin for a company in the insurance sector?

    Learn what the average profit margin is within the insurance industry, and what factors can affect the profitability of an ... Read Answer >>
  6. Who are the best-rated life insurance companies in the US?

    Learn about what makes an insurance company the best. Read about the best life insurance companies in the U.S. in 2014, following ... Read Answer >>
Hot Definitions
  1. Interest Expense

    The cost incurred by an entity for borrowed funds. Interest expense is a non-operating expense shown on the income statement. ...
  2. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  3. Pro-Rata

    Used to describe a proportionate allocation. A method of assigning an amount to a fraction, according to its share of the ...
  4. Private Placement

    The sale of securities to a relatively small number of select investors as a way of raising capital.
  5. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  6. Backward Integration

    A form of vertical integration that involves the purchase of suppliers. Companies will pursue backward integration when it ...
Trading Center