Long-Term Care: Risk Description of a Spanish Portfolio and Economic Analysis of the Timing of Insurance Purchase

Montserrat Guillén () and Jean Pinquet ()
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Montserrat Guillén: Estadística i Economia Espanyola, RFA-IREA, University of Barcelona, Diagonal, 690
Jean Pinquet: Ecole Polytechnique, Département d'Economie

The Geneva Papers on Risk and Insurance - Issues and Practice, 2008, vol. 33, issue 4, No 6, 659-672

Abstract: Abstract This paper analyses the rationale of long-term care (LTC) insurance purchasing from a statistical analysis of insurance data and a life cycle model. We make a short survey of the pros and cons of LTC insurance purchase. Then risk distributions in the occurrence and duration dimension are estimated on a Spanish portfolio. Calendar effects are estimated besides age and gender. These statistical results are integrated in a life cycle model of savings and insurance purchasing. A numerical illustration is also provided, which leads to an optimal age of 40 years for insurance purchase.

Keywords: long-term care insurance; Lee-Carter models; life cycle approach; calendar; gender and age effects (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:pal:gpprii:v:33:y:2008:i:4:d:10.1057_gpp.2008.33

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DOI: 10.1057/gpp.2008.33

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