Ch28: Pricing health and care contracts Flashcards

1
Q

Inception/disabled life annuity approach - the quantity can be derived as the product of the following five components:

A

1) the probability that the policyholder is eligible to claim in the year under consideration (i.e. not dead & not claiming)
2) the claim inception rates corresponding to the year under consideration
3) the value of the annuity that is then payable for the duration of the claim
4) a discount factor (to discount from point of claim to policy inception)
5) the annual benefit amount

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