Pricing of variable long-term care annuities with guaranteed lifetime withdrawal and limited hospitalisation coverage benefits
by Sara S. Moosavi; Amir T. Payandeh Najafabadi
International Journal of Industrial and Systems Engineering (IJISE), Vol. 41, No. 2, 2022

Abstract: Improvements in medical technology and longevity risk increase the popularity of healthcare insurance products. This article combines several well-known healthcare products and develops a theoretical model for a variable annuity product with some specific benefits. More precisely, the new product is a variable annuity product that accompanies with long-term care coverage, limited hospitalisation coverage and a guaranteed lifelong withdrawal benefit option. Under a non-arbitrage market (the geometric Brownian motion) investment, the fair lam sum premium of such insurance products has been evaluated. Using an MCMC simulation method, a numerical study has been conducted to illustrate the capability of the product.

Online publication date: Tue, 28-Jun-2022

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