What might be indicated if Sandy's life insurance premiums are considerably lower than Cindy's, despite both being healthy and of similar age?

Sandy's considerably lower life insurance premiums compared to Cindy's, despite both being healthy and of similar age, can indicate unfair discrimination. This term refers to a scenario where insurance companies treat similar risks differently without a justified reason based on underwriting criteria.

To be considered fair in their pricing, insurers typically evaluate factors like health status, lifestyle choices, and specific characteristics of the policy. However, if Sandy and Cindy both possess similar risk profiles and yet face significantly different premium rates with no underlying justification, it suggests that she may be receiving a preferential treatment that is not warranted by her actual risk level. This could reflect systemic biases or arbitrary distinctions made by the insurer.

While differential underwriting practices and variances in policy types could play a role in premium differences, these would typically yield valid and expected variations that align with the individual risk assessments rather than hinting at unfair discrimination. Similarly, differences in health assessments might explain a disparity if one individual had undisclosed health issues, but in this case, both individuals are described as healthy. Thus, the most compelling interpretation of the pricing discrepancy in this context leans towards indicating unfair discrimination.