Title: On the transferability of reserves in lifelong health insurance contracts
Authors: Dhaene, Jan
Godecharle, Els
Antonio, Katrien
Denuit, Michel
Issue Date: 2015
Publisher: KU Leuven - Faculty of Economics and Business
Series Title: FEB Research Report AFI_15102 pages:1-32
Abstract: For lifelong health insurance covers, medical inflation not sufficiently incorporated in the level premiums determined at policy issue requires an appropriate increase of these premiums and/or of the corresponding reserves during the term of the contract. This premium and/or reserve update is necessary to maintain the actuarial equivalence between future health benefits and withdrawal payments on the one hand, and available reserves and future premiums on the other hand. In Vercruysse et al. (2013), premium and reserve indexing mechanisms were proposed in a discrete-time framework where medical inflation is only taken into account ex-post as it emerges over time and where the reserves are not transferable in case of policy cancellation. In this paper, we extend this work by investigating the more general situation where a surrender value is paid out in case of policy cancellation.
Reserve-based as well as premium-based surrender values are considered.
Publication status: published
KU Leuven publication type: IR
Appears in Collections:Research Center Insurance, Leuven

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