Long Term Critical Illness Insurance Actuarial Model and Empirical Study

This paper explores the actuarial calculations for cancer insurance. By the use of PHASE model in cancer insurance calculations, we can calculate the premiums of first diagnosed cancer and we can also calculate the premiums of cancer medical subsidy which is paid by annuity form as long as cancer patients are not cured, they can obtain the medical treatment allowance each year. The last is the empirical study. Using Taiwan cancer death data, the first diagnosed cancer data and the other data, we can obtain relevant probabilities and actuarial present values of whole life cancer insurance. The cancer insurance actuarial calculation model can be extended to other major disease insurance.