Premiums for Insurance math
Content
I’ve never had a claim, so why are
my premiums increasing?
At its most basic, insurance is a protection plan - where a group of
people place money into a common fund. When someone in the group
suffers a loss, such as a stolen car, they can use that “just in case” fund to
replace the car. The lucky ones will never have to use the fund, but the
unlucky ones will be glad it’s there.
If one person consistently dips into the fund, it’s fair for the other
participants to require him to pay a little more because he represents a
higher risk. Similarly, in a year where many people have losses (or when the
losses are particularly large) everyone will have slightly higher premiums the
next year to ensure the pool is full.
What is insurance fraud and how
does it impact me?
Organized crime and fraud related claims have been on the rise across the
country for some time. This not only drives up costs, but also creates new
problems for the drivers who are targeted. It’s especially a problem in
Ontario, which has Canada’s richest auto insurance benefits and the highest
costs for drivers.
Recently, there has been an increase in fraudulent claims from staged
collisions, which are accidents deliberately set up to cash in on payouts from
insurance claims. To make the collision appear more authentic, fraudsters are
increasingly involving innocent drivers.
What type of auto fraud is happening in my
area?
Target and bullet: staged collisions in which an unsuspecting car is hit
intentionally.
Swoop and squat: a driver slams on their brakes to get an innocent driver
to rear-end the vehicle. In some cases, two vehicles are involved in the fraud,
causing an innocent third party to rear-end the second vehicle.
Drive down or Wave-in: a driver exiting a parking lot is “waved in” by a
driver on the roadway. The roadway driver accelerates into the merging car
once they enter the roadway, intentionally hitting the innocent driver and
causing a collision where the innocent driver appears to be at fault
In these types of collisions, the organizers pay their pre-arranged crash
victims, tow truck drivers, witnesses and questionable medical clinics to
falsify records to profit from insurance payouts.
Insurance Premium Calculation Method
Last
Modified:2012-05-11
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1. Calculating Formula
Insurance premium per month = Monthly insured amount x Insurance
Premium Rate
Insured person's self-paid premium per month= Monthly insured
amount x Insurance Premium Rate x Insured person's self-paid ratio
Insurance premium paid by the governments per month = Monthly
insured amount x Insurance premium rate – Insured person's self-paid
premium
2. During the period of October, 2008 to December, 2011, the premium
for the National
Pension Program was calculated on a monthly basis. In other words,
the premium was collected on a full-month basis regardless of the
number of insured days in the month. Similarly, the number of insured
years was calculated on a full-month basis after the insured has paid
the premium.
3. With effect from January 2012, the premium calculation basis has
been changed to a daily basis. In other words, for those with an
insured period of less than a month, the premium shall be calculated
proportionately according to the actual number of days enrolled and on
a 30 day/month basis. Similarly, the number of years insured will be
calculated according to the actual number of days of premium paid, on
a 30 day/month basis.
4.
How To Calculate Monthly Life
Insurance Premium
5.
| By The Benefits Consultant | Reply
6. Life insurance is expressed as a rate per $1,000 of insurance. To calculate Life Insurance
premium you take the benefit volume per $1,000 of coverage multiplied by the monthly rate. For
example, to calculate the monthly premium based on a 2x annual earnings (assume $40,000)
schedule and a rate of $0.12 per $1,000 of coverage per month, the calculation is: Benefit
Volume * Rate / $1,000 = Monthly premium $80,000 * 0.12 / $1,000 = $9.60
7. How We Calculate Car Insurance Premiums
8. Depending on the province you live in(10), several factors can affect the premium you
pay for car insurance. When you get a quote, we'll ask you questions like the ones
below and take your answers into account when we calculate your premium:
9.
Where do you live?
10.
What kind of vehicle(s) do you drive?
11.
How do you use your car, motorcycle or other vehicles?
12.
What is your driving and claims record?
13.
Who else are you insuring?
14.
How much coverage do you need?
How Premiums Are Calculated
General Premium
National Health Insurance premiums for individuals in category 1, 2, and 3 are calculated based o
the monthly income they report to the National Health Insurance Administration. The premiums o
individuals in categories 4, 5, and 6 are based on the average premium of the people enrolled in
category 1, 2, and 3.
The formulas used to calculate premiums are as follows:
Insured Category
Contributor
Formula
Salary Basis x Premium Rate x
The Insured
Contribution Ratio x (1 + Number of
Dependents)
Salary Basis x Premium Rate x
Category 1,
Wage Earners
Contribution Ratio x (1 + Average
Subcategories 1 to 3
Insurance Registration
Number of Dependents)
Organization or the
Salary Basis x Premium Rate x
Government
Category 2 and 3 Contribution Ratio x (1 + Actual
Number of Dependents)
Non- wage
Average Premium x Contribution Ratio
Earning
The Insured
x (1 + Average Number of
Individuals
Dependents)
Government
Average Premium x Contribution Ratio
x Actual Number of People Insured
NOTES:
1.Salary Basis: The amount on which premiums are calculated based on a payroll bracket table.
2.Insurance Premium Rate: 4.91% since January 1, 2013.
3.Contribution Ratio: Based on ratios set by National Health Insurance Act.
4.Number of Dependents: Maximum of three even if the actual number of dependents is higher.
5.Average Number of Dependents: Set at 0.62 as of January 1, 2015.
6.Since October 1, 2009, the average monthly premium for individuals in categories 4 and 5 has been
NT$1,376, which is entirely subsidized by the government.
7.Since April 2010, the average premium for individuals in category 6 has been NT$1,249, with 60% paid for
by the individual (NT$749) and 40% by the government.
Premium Contribution Ratios under NHI System
Contribution Ratio (%)
Classification of the Insured
Insured
Registration
Organization
Government
Civil servants, volunteer servicemen, Insured and
dependents
public office holders
30
70
0
Private school teachers
Insured and
dependents
30
35
35
Employees of publicly or privately
owned enterprises or institutions
Insured and
dependents
30
60
10
Employers
Self-employed
Independent professionals and
technical specialists
Insured and
dependents
100
0
0
Category2
Occupation union members
Foreign crew members
Insured and
dependents
60
0
40
Category3
Members of farmers’, fishermen’s
and irrigation associations
Insured and
dependents
30
0
70
Category 4 Military conscripts, alternative
Insured
military service, military school
students on scholarships, widows of
deceased military personnel on
pensions, inmates
0
0
100
Category5
Low-income households
Household
members
0
0
100
Category6
Veterans and their dependents
Insured
0
0
100
Dependents
30
0
70
Category1
Other individuals
Insured and
dependents
60
0
40
Payroll Brackets on which Premiums Are Calculated
Salary
Salary
Bracket
Basis(Amoun
Actual
Basis(Amoun
Bracket
Income Income t in which
Monthly
Income t in which
Income
Differentia Tiers
Premiums Salary(NT$
Tiers
Premiums
Differential
l
Calculated)
)
Calculated)
(NT$)
(NT$)
1
Bracket 1
NT$900
Bracket 2
NT$1200
Bracket 3
NT$1500
19,047
2
19,200
3
20,100
4
21,000
5
21,900
6
22,800
7
24,000
8
25,200
9
26,400
10
27,600
11
28,800
12
30,300
13
31,800
14
33,300
15
34,800
Under
19,047
19,04819,200
19,27420,100
20,10121,000
21,00121,900
21,90122,800
22,80124,000
24,00125,200
25,20126,400
26,40127,600
27,60128,800
28,80130,300
30,30131,800
31,80133,300
33,301-
Bracket 6
NT$3,000
Bracket 7
NT$3,700
Bracket 8
NT$4,500
Bracket 9
NT$5,400
27
60,800
28
63,800
29
66,800
30
69,800
31
72,800
32
76,500
33
80,200
34
83,900
35
87,600
36
92,100
37
96,600
38
101,100
39
105,600
40
110,100
41
115,500
42
120,900
34,800
34,80116
36,300
36,300
36,30117
38,200
38,200
38,20118
40,100
40,100
Bracket 4
40,10119
42,000
NT$1900
42,000
42,00120
43,900
43,900
43,90121
45,800
45,800
45,80122
48,200
48,200
48,20123
50,600
50,600
Bracket 5
50,60124
53,000
NT$2,400
53,000
53,00125
55,400
55,400
55,40126
57,800
57,800
*This table took effect from July 1, 2014.
Bracket 10
NT$6,400
43
126,300
44
131,700
45
137,100
46
142,500
47
147,900
48
150,000
49
156,400
50
162,800
51
169,200
52
175,600
53
182,000
Supplementary Premium Calculation Principles
In addition to the basic premium, the insured will be charged a 2% supplementary premium when
receiving other types of income, including large bonuses, stock dividends, part-time job income,
interest income, income for professional practice, and rental income. Employers will be also
collected supplementary premium.
The formulas to calculate supplementary premiums are as follows.
Supplementary Premium
I.Contribution by the Employer (The Group Insurance Applicant):
(Total payroll expense by the employer- total insured payroll-related amount for the employees) ×
Supplementary Premium Rate (2%）
II.Contribution by the Insured:
Supplementary premium = Relevant income amount × supplementary premium rate (2%)
Update：2015/04/29
my premiums increasing?
At its most basic, insurance is a protection plan - where a group of
people place money into a common fund. When someone in the group
suffers a loss, such as a stolen car, they can use that “just in case” fund to
replace the car. The lucky ones will never have to use the fund, but the
unlucky ones will be glad it’s there.
If one person consistently dips into the fund, it’s fair for the other
participants to require him to pay a little more because he represents a
higher risk. Similarly, in a year where many people have losses (or when the
losses are particularly large) everyone will have slightly higher premiums the
next year to ensure the pool is full.
What is insurance fraud and how
does it impact me?
Organized crime and fraud related claims have been on the rise across the
country for some time. This not only drives up costs, but also creates new
problems for the drivers who are targeted. It’s especially a problem in
Ontario, which has Canada’s richest auto insurance benefits and the highest
costs for drivers.
Recently, there has been an increase in fraudulent claims from staged
collisions, which are accidents deliberately set up to cash in on payouts from
insurance claims. To make the collision appear more authentic, fraudsters are
increasingly involving innocent drivers.
What type of auto fraud is happening in my
area?
Target and bullet: staged collisions in which an unsuspecting car is hit
intentionally.
Swoop and squat: a driver slams on their brakes to get an innocent driver
to rear-end the vehicle. In some cases, two vehicles are involved in the fraud,
causing an innocent third party to rear-end the second vehicle.
Drive down or Wave-in: a driver exiting a parking lot is “waved in” by a
driver on the roadway. The roadway driver accelerates into the merging car
once they enter the roadway, intentionally hitting the innocent driver and
causing a collision where the innocent driver appears to be at fault
In these types of collisions, the organizers pay their pre-arranged crash
victims, tow truck drivers, witnesses and questionable medical clinics to
falsify records to profit from insurance payouts.
Insurance Premium Calculation Method
Last
Modified:2012-05-11
Font size:
Forward
1. Calculating Formula
Insurance premium per month = Monthly insured amount x Insurance
Premium Rate
Insured person's self-paid premium per month= Monthly insured
amount x Insurance Premium Rate x Insured person's self-paid ratio
Insurance premium paid by the governments per month = Monthly
insured amount x Insurance premium rate – Insured person's self-paid
premium
2. During the period of October, 2008 to December, 2011, the premium
for the National
Pension Program was calculated on a monthly basis. In other words,
the premium was collected on a full-month basis regardless of the
number of insured days in the month. Similarly, the number of insured
years was calculated on a full-month basis after the insured has paid
the premium.
3. With effect from January 2012, the premium calculation basis has
been changed to a daily basis. In other words, for those with an
insured period of less than a month, the premium shall be calculated
proportionately according to the actual number of days enrolled and on
a 30 day/month basis. Similarly, the number of years insured will be
calculated according to the actual number of days of premium paid, on
a 30 day/month basis.
4.
How To Calculate Monthly Life
Insurance Premium
5.
| By The Benefits Consultant | Reply
6. Life insurance is expressed as a rate per $1,000 of insurance. To calculate Life Insurance
premium you take the benefit volume per $1,000 of coverage multiplied by the monthly rate. For
example, to calculate the monthly premium based on a 2x annual earnings (assume $40,000)
schedule and a rate of $0.12 per $1,000 of coverage per month, the calculation is: Benefit
Volume * Rate / $1,000 = Monthly premium $80,000 * 0.12 / $1,000 = $9.60
7. How We Calculate Car Insurance Premiums
8. Depending on the province you live in(10), several factors can affect the premium you
pay for car insurance. When you get a quote, we'll ask you questions like the ones
below and take your answers into account when we calculate your premium:
9.
Where do you live?
10.
What kind of vehicle(s) do you drive?
11.
How do you use your car, motorcycle or other vehicles?
12.
What is your driving and claims record?
13.
Who else are you insuring?
14.
How much coverage do you need?
How Premiums Are Calculated
General Premium
National Health Insurance premiums for individuals in category 1, 2, and 3 are calculated based o
the monthly income they report to the National Health Insurance Administration. The premiums o
individuals in categories 4, 5, and 6 are based on the average premium of the people enrolled in
category 1, 2, and 3.
The formulas used to calculate premiums are as follows:
Insured Category
Contributor
Formula
Salary Basis x Premium Rate x
The Insured
Contribution Ratio x (1 + Number of
Dependents)
Salary Basis x Premium Rate x
Category 1,
Wage Earners
Contribution Ratio x (1 + Average
Subcategories 1 to 3
Insurance Registration
Number of Dependents)
Organization or the
Salary Basis x Premium Rate x
Government
Category 2 and 3 Contribution Ratio x (1 + Actual
Number of Dependents)
Non- wage
Average Premium x Contribution Ratio
Earning
The Insured
x (1 + Average Number of
Individuals
Dependents)
Government
Average Premium x Contribution Ratio
x Actual Number of People Insured
NOTES:
1.Salary Basis: The amount on which premiums are calculated based on a payroll bracket table.
2.Insurance Premium Rate: 4.91% since January 1, 2013.
3.Contribution Ratio: Based on ratios set by National Health Insurance Act.
4.Number of Dependents: Maximum of three even if the actual number of dependents is higher.
5.Average Number of Dependents: Set at 0.62 as of January 1, 2015.
6.Since October 1, 2009, the average monthly premium for individuals in categories 4 and 5 has been
NT$1,376, which is entirely subsidized by the government.
7.Since April 2010, the average premium for individuals in category 6 has been NT$1,249, with 60% paid for
by the individual (NT$749) and 40% by the government.
Premium Contribution Ratios under NHI System
Contribution Ratio (%)
Classification of the Insured
Insured
Registration
Organization
Government
Civil servants, volunteer servicemen, Insured and
dependents
public office holders
30
70
0
Private school teachers
Insured and
dependents
30
35
35
Employees of publicly or privately
owned enterprises or institutions
Insured and
dependents
30
60
10
Employers
Self-employed
Independent professionals and
technical specialists
Insured and
dependents
100
0
0
Category2
Occupation union members
Foreign crew members
Insured and
dependents
60
0
40
Category3
Members of farmers’, fishermen’s
and irrigation associations
Insured and
dependents
30
0
70
Category 4 Military conscripts, alternative
Insured
military service, military school
students on scholarships, widows of
deceased military personnel on
pensions, inmates
0
0
100
Category5
Low-income households
Household
members
0
0
100
Category6
Veterans and their dependents
Insured
0
0
100
Dependents
30
0
70
Category1
Other individuals
Insured and
dependents
60
0
40
Payroll Brackets on which Premiums Are Calculated
Salary
Salary
Bracket
Basis(Amoun
Actual
Basis(Amoun
Bracket
Income Income t in which
Monthly
Income t in which
Income
Differentia Tiers
Premiums Salary(NT$
Tiers
Premiums
Differential
l
Calculated)
)
Calculated)
(NT$)
(NT$)
1
Bracket 1
NT$900
Bracket 2
NT$1200
Bracket 3
NT$1500
19,047
2
19,200
3
20,100
4
21,000
5
21,900
6
22,800
7
24,000
8
25,200
9
26,400
10
27,600
11
28,800
12
30,300
13
31,800
14
33,300
15
34,800
Under
19,047
19,04819,200
19,27420,100
20,10121,000
21,00121,900
21,90122,800
22,80124,000
24,00125,200
25,20126,400
26,40127,600
27,60128,800
28,80130,300
30,30131,800
31,80133,300
33,301-
Bracket 6
NT$3,000
Bracket 7
NT$3,700
Bracket 8
NT$4,500
Bracket 9
NT$5,400
27
60,800
28
63,800
29
66,800
30
69,800
31
72,800
32
76,500
33
80,200
34
83,900
35
87,600
36
92,100
37
96,600
38
101,100
39
105,600
40
110,100
41
115,500
42
120,900
34,800
34,80116
36,300
36,300
36,30117
38,200
38,200
38,20118
40,100
40,100
Bracket 4
40,10119
42,000
NT$1900
42,000
42,00120
43,900
43,900
43,90121
45,800
45,800
45,80122
48,200
48,200
48,20123
50,600
50,600
Bracket 5
50,60124
53,000
NT$2,400
53,000
53,00125
55,400
55,400
55,40126
57,800
57,800
*This table took effect from July 1, 2014.
Bracket 10
NT$6,400
43
126,300
44
131,700
45
137,100
46
142,500
47
147,900
48
150,000
49
156,400
50
162,800
51
169,200
52
175,600
53
182,000
Supplementary Premium Calculation Principles
In addition to the basic premium, the insured will be charged a 2% supplementary premium when
receiving other types of income, including large bonuses, stock dividends, part-time job income,
interest income, income for professional practice, and rental income. Employers will be also
collected supplementary premium.
The formulas to calculate supplementary premiums are as follows.
Supplementary Premium
I.Contribution by the Employer (The Group Insurance Applicant):
(Total payroll expense by the employer- total insured payroll-related amount for the employees) ×
Supplementary Premium Rate (2%）
II.Contribution by the Insured:
Supplementary premium = Relevant income amount × supplementary premium rate (2%)
Update：2015/04/29
