Disability Income Flashcards
1
Q
Disability Income
Types of Reserves
A
- Active life reserves
- Disabled life reserves
2
Q
Disability Income
Pricing Factors
A
- Persistency
- Expenses
- Taxes
- Interest Rate
- Premium Volume
- Profit Margin
3
Q
Disability Income
Morbidity vs. Loss Ratio Studies
A
Morbidity studies are preferred, but not many companies have enough data to do them. Loss Ratio Studies are much more common
4
Q
Disability Income
Morbidity Study Elements
A
- Rate of disability
- Rate of recovery
5
Q
Disability Income
Types of Loss Ratio Studies (Define)
A
- Cash-Claims Ratio = Cash Claims / Earned Premium
- Incurred Claims Ratio = (Cash Claims + Active Life Reserve + Claims Reserve) / Earned Premium
Incurred claims ratio is more reliable because it measures future liability of open claims
6
Q
Disability Income
Important Parameters to Analyze in Disability Portfolio
A
- Occupation
- Extra benefits
- Age
- Duration
- Elimination/Benefit periods
- Indemnity
- Income
- Geography
- Sex
- Smoking Status
