Long-Term Care Insurance Living Benefits: Risk Profiles
Life annuities are aimed at providing income and, notably, post-retirement income. In the context of health insurance, long-term care insurance (LTCI) products conversely aim at protection against the risk of senescent disability. Technical and financial features of the above products might negatively impact their attractiveness, from both the customer’s and the insurer’s perspective. Nonetheless, appropriate combinations of benefits can result in more attractive policy designs. As LTCI products are rather recent, scarcity of data and data quality cause a significant exposure to the uncertainty risk inherent in the choice of the biometric bases. A sensitivity analysis then allows us to quantify, for diverse products, the degree of exposure to this risk.