Model Risk, Mortality Heterogeneity and Implications for Solvency and Tail Risk

Abstract

Links to third party websites are provided by Oxford in good faith and for information only. Oxford disclaims any responsibility for the materials contained in any third party website referenced in this work. Contents List of Figures ix List of Tables xiii Notes on Contributors xv 1. Recreating Retirement Sustainability

Health Transition Probability and Long-Term Care Cost Estimation

“…e single premiums with different ages and genders are shown in Table 6. It should be noted that, according to the insurance practice, we calculate the payment period as 60 years old, and the calculation of the above cost starts at 65 years old due to insufficient data in the 60-65-year-old sample, so we first discount the total cost to 60 years old according to (11) and then calculate the premium according to (12). As seen in Table 6, the single premium for the males at the age of 25 years old is 0.351 and that for women is 0.752.…”

“…Another weakness is that the result is average without considering initial health status, which means healthy and unhealthy people have the same trajectory of health changes and the same care cost. Obviously, its results will fail to meet the actuarial requirements [12][13][14]. erefore, dynamic methods are proposed to resolve these problems.…”