The insurance prices you pay actually depend on something we have not stressed before: your health status. For example, a 50-year-old male who is in exceptional health would pay only $23.85 per month for a 20-year policy whose death benefit is $100,000. In contrast, a 50-year-old male in only average health would have to pay $38.69 for the same contractual terms. As you can see, the 62% markup is quite a substantial incentive to prove you are in exceptional health (if you are) when purchasing life insurance. In the lingo of our mortality laws, the IFM curve λ(x) for a very healthy individual is “lower” than the IFM curve for a less healthy individual. Without abusing the notation too much, you can imagine a whole family of IFM curves λ(x, i), where the index i = 1, . . . , n captures the health of the individual at age x. With regard to health status, it is important to recognize the adverse selection that may occur as a result of information asymmetries between the insurance applicant and the insurance company. That is, the applicant may be affected by or predisposed to a health condition yet may withhold this information from the insurer. As a result this applicant will be undercharged for the actual level of risk undertaken by the insurer. In fact, potential evidence of adverse selection was revealed in the Tillinghast Older Age Mortality Study (Tillinghast 2004), which stated that the number of deaths resulting from cancer was higher during the early years of life insurance policy terms than during the later years. It is important to note the substantial impact of health on insurance premiums, which is something we did not experience (and is quite rare) for pension annuities.