Funding Sickness Benefits for the Elderly

This paper analyzes how the longevity risk affects sickness insurance. In particular, the problem of funding medical expenses covers for the elderly is studied. Different premium systems are considered and the relevant riskiness is evaluated. The evaluation of the riskiness is performed using a deterministic projected survival function as well as considering the randomness inherent in any projection procedure.

Keywords: Sickness insurance, Medical expenses cover, Post-retirement sickness benefits, Longevity risk, Premium calculation