Can life insurance be a lever to push down gun ownership?
About our epidemic of gun violence, I have a somewhat “actuarial” question: are life insurance companies a good pressure point for reducing gun violence? Here’s my logic.
- Cancer survivors have to wait five years after getting a clean bill of health before they can get a reasonably-priced life insurance policy. (My own five-year anniversary is Jan 31, at which point my quoted rate drops to normal instead of ~$800/month.)
- In 2009, there were 9,146 homicides by firearm — in the top 50 causes of death in the U.S. that year, that puts homicides by firearm above 3 cancers and at least 5 other diseases that would disqualify a person for life insurance.
- While I can’t find an exact number, there is a significant correlation between a person owning a firearm and that same person dying in a homicide by firearm. Anecdotally, I’ve heard it doubles your risk.
I spoke with an insurance company this morning, and they confirm they do not take firearm ownership into account when they determine the price of a life insurance policy. So questions:
- Why don’t they?
- If there’s a good actuarial reason for not taking gun ownership into account, could it be that those less-likely causes of death reinforce each other, that those with cervical cancer are significantly more likely to get oral cancer? In other words, do deaths by less-likely causes of death add up to something higher than the homicide of a gun owner?
- Conversely, are there causes of death correlated to gun ownership other than homicide (and suicide)? The likelihood one will develop alcoholism? That one will die by other kinds of violence?
- If so, are those absolute numbers too low to matter to insurers? 0.8% of Americans died in 2009. .003% of Americans died in homicides by firearms, so 0.37% of all American deaths in 2009 were by homicide by firearm.
- What percentage of those .37% (that original 9,146 homicides by firearm) were eligible for life insurance?
- Of that percentage, how many owned guns?
- Is that number too small for insurance companies to care?
Probably. Conclusion: Convincing life insurers to charge more of gun owners, with gun ownership as the sole factor in price, would have little effect on homicides by guns. Another factor might be that the U.S. has so many gun owners, the “gun homicide premium” is already socialized throughout the life insurance-holding population.
That leaves health insurance premiums as the remaining commercial, as opposed to legislative and cultural, deterrent to gun ownership. That’s especially true in that health insurance is triggered throughout one’s life, rather than just at death: health insurers would have a strong motivation to charge more of gun owners should gun ownership be strongly correlated with non-fatal injuries or illnesses.
Or are there other commercial deterrents?