Why might family history of disease not impact insurance premium costs?

The reasoning behind the idea that family history of disease might not impact insurance premium costs is primarily grounded in the difficulty of properly segmenting the population based on that information. While an individual's family history can be an indicator of potential health risks, insurance actuaries face challenges in translating that data into precise risk assessments. For example, genetic predispositions do not always result in a higher probability of disease manifesting, as they can be influenced by numerous environmental and lifestyle factors.

Consequently, even if some individuals might be categorized as higher risk based on family history, the lack of clear thresholds and the variability in outcomes make it hard to draw distinct lines for premium pricing. Insurers may prefer to rely on more direct measures of health and behavior that can be more definitively tied to risk, leading them to shy away from incorporating family history into their pricing models.