In most industrialised countries, one of the major societal challenges is the demographic change coming along with the ageing of the population. The increasing life expectancy observed over the last decades underlines the importance to find ways to appropriately cover the financial needs of the elderly. A particular issue arises in the area of health, where sufficient care must be provided to a growing number of dependent elderly in need of long-term care (LTC) services. In many markets, the offering of life insurance products incorporating care options and LTC insurance products is generally scarce. In our research, we therefore examine a life annuity product with an embedded care option potentially providing additional financial support to dependent persons. To evaluate the care option, we determine the minimum price that the annuity provider requires and the policyholder’s willingness to pay for the care option. For the latter, we employ individual utility functions taking account of the policyholder’s condition. We base our numerical study on recently developed transition probability data from Switzerland. Our findings give new and realistic insights into the nature and the utility of life annuity products proposing an embedded care option for tackling the financing of LTC needs.

中文翻译：

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对包含在人寿年金中的长期护理选择进行评估

在大多数工业化国家，主要的社会挑战之一是人口老龄化带来的人口变化。过去几十年观察到的预期寿命不断增加，凸显了找到适当满足老年人财务需求的方法的重要性。健康领域出现了一个特殊问题，必须为越来越多需要长期护理 (LTC) 服务的受抚养老年人提供足够的护理。在许多市场中，提供包含护理选项和 LTC 保险产品的人寿保险产品普遍稀缺。因此，在我们的研究中，我们研究了一种具有嵌入式护理选项的人寿年金产品，该产品可能为受抚养人提供额外的经济支持。为了评估护理选项，我们确定年金提供者要求的最低价格以及投保人支付护理选项的意愿。对于后者，我们在考虑投保人状况的情况下采用个人效用函数。我们的数值研究基于瑞士最近开发的过渡概率数据。我们的研究结果对人寿年金产品的性质和效用提供了新的和现实的见解，提出了一种嵌入式护理选项来解决长期护理费用需求的融资问题。