Practical example of a split benefit accelerated critical illness insurance product

Document description

This dissertation proposes a new multi-state modelling framework for a general buy-back accelerated critical illness (ACI) product. This product allows the insured to receive a critical illness benefit payable on each of two occasions, when one of the ACI qualifying treatments is satisfied, rather than only once as in the standard ACI product. The additional premium cost of this general buy-back product is illustrated for different ages and different proportions of buy-back benefit reinstated, compared to a standard ACI product.

Further examples are provided which take into consideration that only certain qualifying conditions are to receive a reinstatement. By introducing another state for the remaining non-qualifying conditions in this model, we can allow for the higher subsequent incidence rate to be considered for these qualifying conditions. 

Keywords:  Accelerated Critical Illness, Buy-Back Model, Cancer Model, Morbidity, Multi-State Modelling