Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments March 14, 2023 erstellt
Description:
Background: This paper examines the implicit healthy life expectancy (HLE) used for actuarial calculations in some selected biometric data sets from Australia, China, Portugal, Spain and the US. We are interested in checking the demographic and epidemiological coherence of these data sets because this health indicator is rarely presented when authors build their biometric data sets, nor when they are used to calculate long-term care insurance (LTCI) and life care annuity (LCAs) premiums, nor when they are employed in research articles to estimate the future demand for LTC services in a particular country. Methods: We follow a methodology based on multistate life table methods (MLTM) that enables us to obtain a life expectancy matrix for individuals on the basis of their initial health state. Multistate models provide an easy-to-apply procedure for life and health insurance contracts, including LTC. We also present some additional indicators of longevity, mortality and morbidity, these being the median age at death, the interquartile range, the weighted modal age at death, the mortality ratio, the implicit LTC prevalence rates and the survivorship curves broken down by health state. Results: We find several weaknesses that highlight the difficulty involved in building the biometric data sets needed to make an actuarially fair valuation of the premiums for LTCI and LCAs. We also verify the existence of the so-called “male-female health-survival paradox”, i.e. the fact that women have greater longevity than men but are also likely to spend proportionally more time in some state of dependence, irrespective of the initial health state. Conclusion: It is not surprising that insurance companies are becoming less willing to offer LTCI and LCA contracts given that they face a serious problem with the biometric aspect when it comes to calculating actuarially fair premiums with any degree of certainty. From the perspective of a potential purchaser of this type of insurance product, disclosing and explaining the summary measures of health and longevity would make it easier for them to understand the need to protect themselves against the cost of possible LTC services and also make the computation of the premiums more transparent