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Old 05-04-2018, 04:34 AM
wangxy wangxy is offline
 
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Lightbulb How do you price when there is a Change of Insured option?

Hi Guys,

In Hong Kong, certain saving products (we call it 105/101 product, where death protection is 105/101% of total premium paid) offer this option called "Change of Insured". Basically, the policy owner can apply to change the insured until the "first" insured reaches age 120+ regardless if the first insured is alive or not. They are promoting this option to people who are willing to pass wealth to next few generations.

Since the death benefit is very small, Guaranteed Cash Value plus bonus would become larger very soon then it becomes a pure saving account. However to "accurately" calculate profits, I am still interested to know how cashflows should be projected since most mortality tables stop at around age 100 or so. Should you just assume mortality only when there is a risk exposure and zero them out afterwards? I would love to hear some inputs.

Many thanks in advance.
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Old 05-04-2018, 08:01 AM
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Carol Marler
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https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5696798/

You can find lots more by putting "high age mortality" (without quote marks) into Google.
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