The Valuation of Lifetime Health Insurance Policies with Limited Coverage

Yang, Shang-Yin; Wang, Chou‐Wen; Huang, Hong

doi:10.1111/jori.12070

Cited by 5 publications

(1 citation statement)

References 28 publications

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“…A large body of literature has shown the ability of Markov chains to describe disability states (see, e.g., Pitacco 1995) or hospitalization conditions, and mode of discharge (see, e.g., Jones et al (2019)). The works by Manton et al (1993), Haberman and Pitacco (2018), Pritchard (2006), Baione and Levantesi (2014) and Yang et al (2016) have used continuous-time Markov processes to model the health status transitions.…”

Section: Introductionmentioning

confidence: 99%

Analysis of fair fee in guaranteed lifelong withdrawal and Markovian health benefits

2023

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This study proposed and evaluated a new insurance product, i.e., the variable annuity product, accompanied by the health status and the guaranteed lifelong withdrawal benefit (GLWB). Due to specific problems, the insurance sector is now one of the riskiest industries. The aging of the population and rising medical service costs as a result of technological advancements are to blame for this. Thus one of the most basic needs in the health insurance sector is to design an innovative product. In this article, a mixed discrete-continuous time model is proposed to calculate the fair fee of the product, calculated using equilibrium condition between premium and benefits. We considered constant volatility and rate of interest along with health status benefits and hospitalization coverage. For an illustration of the capability of this product and some possible improvements in the product, a numerical study, and sensitivity analysis have been conducted. The results showed that the withdrawal amount and age have a significant impact on the cost. A rise in the initial insured age and withdrawal amount increases the fair fee of the product. The GLWB rider’s guaranteed amount and medical expenses are included in the withdrawal amount.

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Section: Introductionmentioning

confidence: 99%

Analysis of fair fee in guaranteed lifelong withdrawal and Markovian health benefits

2023

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Valuation of variable long-term care and limited hospitalization coverage benefits and two investment funds

Moosavi

Najafabadi

2022

Soft Comput

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Optimal reimbursement limitation for a health plan

Baione,

Biancalana,

Menzietti

2023

Ann Oper Res

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The goal of this paper is the assessment of an optimal reimbursement strategy for employer-based health insurance plans (HP), that cover several categories of medical services. Indeed, a health plan may offer several cost-sharing provisions for these categories, and the “Percent Expense Paid” by the plan also known as “Actuarial Value” represents a summary measure of the protection provided. Starting from a wide industrial applied model in insurance for rate-making, the generalized linear models (GLM), we estimate the expected value and variance of the health expenditure for each category. Moreover, different reimbursement rules (e.g. deductibles, co-payments, policy limits, etc.) involve a change of the “Actuarial Value” calculated as the ratio between the benefits paid by the plan (i.e. reimbursement amounts) and the expenses paid by policyholders (i.e. expenditures). The latter is the percentage of expenditure reimbursed by the plan and is sometimes defined in actuarial literature as Indicated Deductible Relativity (IDR); an IDR can be calculated for each category covered by the Health Plan or per policyholder and is a commonly used method for scoring the benefits of health insurance. Hence, we calculate the optimal IDR for each category, using the optimization problem proposed by de by Finetti (Il problema dei pieni, Giornale dell’istituto italiano degli attuari, 1940) in the context of proportional reinsurance. The goal is the minimization of the variance of the total reimbursement of the Health Plan by fixing the total gain. Furthermore, we propose a numerical application to a real dataset, containing observed expenditures of an Italian HP.

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The Valuation of Lifetime Health Insurance Policies with Limited Coverage

Cited by 5 publications

References 28 publications

Analysis of fair fee in guaranteed lifelong withdrawal and Markovian health benefits

Analysis of fair fee in guaranteed lifelong withdrawal and Markovian health benefits

Valuation of variable long-term care and limited hospitalization coverage benefits and two investment funds

Optimal reimbursement limitation for a health plan

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