Mark J. Chartier
Abstract
There are several actuarial software packages purporting to calculate expected benefit cash flows on disability income insurance policies. To the author's knowledge, however, there is no published text that explains how to perform these calculations. This paper is intended to fill this gap in the literature. It describes some of the more common techniques for pricing disability income insurance. Those techniques for which claim costs can be used and those for which the pricing actuary must project cash flows are identified.
Key words and phrases: benefits, claim costs, cash flows, incidence rate, exposure, survivorship function
Mark J. Chartier