A Multiple State Model for Premium Calculation when Several Premium-Paid States are Involved

Joanna Dębicka , Beata Zmyślona

Abstract

The aim of this contribution is to derive a general matrix formula for the net period premium paid in more than one state. In order to avoid “overpayment” which implies higher premiums we give a formula for replacement of lump sum benefit into annuity benefits paid in more than one state. The obtained result is useful for example to more advanced models of dread disease insurances allowing period premiums paid by both healthy and ill person (e.g. not terminally yet). As an application, we supply analysis of dread disease insurances against the risk of lung cancer based on the actual data for the Lower Silesian Voivodship in Poland.
Author Joanna Dębicka (MISaF / IZM / KS)
Joanna Dębicka,,
- Katedra Statystyki
, Beata Zmyślona (MISaF / IZM / KS)
Beata Zmyślona,,
- Katedra Statystyki
Journal seriesCentral European Journal of Economic Modelling and Econometrics, ISSN 2080-0886, e-ISSN 2080-119X, (B 14 pkt)
Issue year2018
Vol10
No1
Pages27-52
Publication size in sheets1.25
Keywords in Englishmodified multiple state model, net premium, life annuity, critical illness insurance, accelerated death benefits
URL http://cejeme.org/publishedarticles/2018-07-30-636579976472343750-1612.pdf
Languageen angielski
Score (nominal)14
Publication indicators Scopus Citations = 0; WoS Citations = 0
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