Why might one of two identical twins be charged a 25 percent higher premium for their life insurance policy?

The charge of a 25 percent higher premium for one of the identical twins can primarily be attributed to risk classification. Life insurance companies assess various risk factors to determine the likelihood of a policyholder making a claim. Despite being identical twins, individual differences such as health history, lifestyle choices, occupation, and hobbies may lead insurers to classify one twin as a higher risk than the other. This classification influences the premiums, as higher-risk individuals are usually required to pay higher rates to compensate for the increased likelihood of a claim.

This scenario demonstrates how factors beyond mere physical resemblance play a critical role in the underwriting process. Identical twins may share many traits, but subtle distinctions can result in different insurance assessments. Insurers evaluate these risk classifications based on statistical data, ensuring that premium amounts reflect the actual risk of loss the company undertakes.