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Actuarial Values for Long-term Care Insurance Products: A Sensitivity Analysis

Elderly couple enjoying life

Ermanno Pitacco

Long-term care insurance (LTCI) covers are rather recent products, in the framework of health insurance. It follows that specific biometric data are scanty, and pricing problems then arise because of difficulties in the choice of appropriate technical bases.

Different benefit structures imply different sensitivity degrees with respect to changes in biometric assumptions. Hence, an accurate sensitivity analysis can help in designing LTCI products, and, in particular, in comparing standalone products to combined products, i.e. packages including LTCI benefits and other lifetime-related benefits.

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