NET SINGLE PREMIUM ON CRITICAL ILLNESS INSURANCE WITH MULTI-STATE MODEL

Abstract

The chances of someone getting a disease or suffering from a critical illness are very large, especially when they get older, the chances of getting a critical illness will be higher. A guarantee of the future is indispensable if a person suffers from a critical illness at any time and requires considerable costs to undergo treatment. Insurance is one of the right choices and is beneficial for people with critical illnesses. In this study, the calculation of Critical Illness insurance premiums was carried out to determine the value of premiums that must be paid by a person when suffering from a critical illness. The types of critical illnesses used include cancer, heart disease, stroke, kidney failure, diabetes mellitus, and hypertension. Health insurance that protects insureds suffering from critical illnesses is Long Term Care insurance with the Annuity as A Rider Benefit product. The multi-state model is used to determine the probability of a person suffering from a critical illness. The benefits obtained are in the form of death compensation, and treatment costs when the insured is diagnosed with a critical illness. The data used are data on the prevalence of critical illnesses and the percentage of deaths due to critical illnesses. In this study, we will compare the amount of premium that must be paid by the insured with different interest rates, gender, coverage period, and age. The higher the age at the beginning of following the insurance, the higher the premium. The higher the interest rate during the payer's period, the lower the premium.