The frequency with which a disease appears in a population. Morbidity rates are used in actuarial professions, like life insurance, health insurance and long term care insurance, to determine the correct premiums to charge to policyholders.
Morbidity rates help insurers predict the likelihood that an insured will contract or develop any number of specified diseases.
The ability to accurately predict how many policyholders will get sick and what diseases they will get sick with helps insurers predict how much money they will spend to provide treatment for insurance policyholders. Thus, accurate morbidity rates are crucial for keeping insurance companies in business.
Morbidity rate should not be confused with mortality rate, which is the frequency of death in a given population.
Source: Investopedia
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