Pricing Research On Long-Term Care Insurance

There will be serious aging problem in China. The changing of family construction change the convention thinking that son will do help to their parent when their parent are old. Especially in city, more and more old person will choose living in nursing-house when they can not take care of themselves. So the result is that they have to pay for nursing fee. Because demand for long-term care and lack of nursing resources, so the nursing fee will show the tendency to rise. This is the risk that can be forecast to the young, but this is the potential demand in the insurance market. It is the long-term care insurance that fix the demand. But in China, the actuary will face a lot of difficult, especially on the aspect of pricing. The actuary will focus on the research and explore. Because on this basic goal, the author link the pricing method of long-term care to the pricing process and make some trial research.The article focuses on the pricing of long-term care, including of product write-up, pricing method, pricing process and consideration factor. For product pricing, firstly actuary will define the product, clear–out insurance duty and product feature. They will be finished in the process of write–up. Compare with some definition of long-term care and long-term care insurance, the author elaborates some viewpoint. Pitch long-term care in the field of long-term health insurance, Clear-out the insurance duty. Different with viewpoint of some other author .the author has his own viewpoint: the determination standard of cognitive competence should be the standard of sum insured.In the part of theory research of pricing method, the author introduces the principle of Manchester method, decrement table model, multimode Markov model. The author makes the pricing example applying with simple digital and evaluate to the three methods. Lastly on the basic of principle of three methods the author make some comparisons in the help of the aspect of technical including actuary technical and the software and hardware applying for pricing. The author has his point that it is correct that using of decrement table model in pricing for long-term care insurance.It is time for pricing when clear-out the definition of product and insurance duty and learn by heart to the pricing method. In this part introduce the general consideration factor for product pricing, including digital, cancellation, anti-selection and surcharge. The author describes the setting principle of surcharge. The actuary will use life table and LTC-rate table when they price for the product of long-term care insurance. Compare with digital in the two tables, the author clear-out the principle of using digital. It is the most important that parameter setting in the Pricing process. The author analyzes the impact of a series of parameter to premium rate. Once after the parameter setting, the result of profit margin is confirmed. So the actuary can balance the competitive strength of product and profit of shareholder with adjustment of parameter. This is the pricing process for long-term care insurance.The research method is compounding with theory and practice. The author put knowledge gained of working in the actuary department into the article. So the article has some utility value.