When a person purchases a health insurance policy, they are buying protection against financial losses that could occur if the insured suddenly became ill or injured and required medical treatment. The cost of medical procedures, services, and treatments can be astronomical and without an adequate health insurance policy in place, these expenses must be paid for out of pocket. Obtaining more than one health insurance quote will give you a good idea of what monthly premiums you will be paying. A health insurance quote is determined by combining a number of factors such as an individual's health status, family history, and the services and recommendations of health actuaries.

Actuaries are people who work together with insurance companies in order to help calculate monthly or yearly health insurance premiums. They use complex formulas to arrive at a final number that each individual must pay to receive health insurance benefits. Their role is a unique one because they use these formulas to accurately predict the likelihood that an individual will develop a serious health condition or chronic illness. Some factors that they review are family medical history of the individual as well as the area they live in.

Insurance companies are all about risk. Actuaries help them to figure out the level of risk an applicant will pose to an insurance company. The higher the risk, the higher premiums the individual will have to pay. Ideally, health insurance companies prefer applicants who are not likely to file a claim with their health insurance policy. The younger and healthier a person is, the better risk they are for the insurance company to take on. Actuaries will help calculate this risk so that the insurance company can collect more in premiums and pay out less money in claims.

Health actuaries benefit consumers as well as the insurance companies. Although it does seem like they are more on the side of insurance companies, their risk assessment helps to ensure that premiums charged are fair for the consumers based on certain factors. This is why premiums will vary from one state to another. Some areas of the country will pay more premiums because of the surrounding environment, average age of residents, and level of education. For example, an area with a higher senior population will have higher premiums because there is a higher risk of the population developing heart disease, diabetes, or Alzheimer's disease. As well, if the majority of a population lives in poverty, they are more likely to seek medical attention.

Understanding the role that health actuaries play in determining health insurance premiums is one step to helping you to become fully knowledgeable about the coverages in your own policy.