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Transferable Ageing Provisions in Individual Health Insurance Contracts


  • Florian Baumann
  • Volker Meier


  • Martin Werding


We consider lifetime health insurance contracts in which ageing provisions are used to smooth the premium profile. The stock of capital accumulated for each individual can be split into two parts: a premium insurance and an annuitised life insurance, where the latter would be transferable between insurers without triggering premium changes through risk segmentation. In a simulation based on German data, the transferable share declines in age. It is smaller for women than for men, and it falls with an increasing age of entry into the contract.

Suggested Citation

  • Florian Baumann & Volker Meier & Martin Werding, 2004. "Transferable Ageing Provisions in Individual Health Insurance Contracts," CESifo Working Paper Series 1116, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_1116

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    References listed on IDEAS

    1. Volker Meier, 2005. "Efficient Transfer of Aging Provisions in Private Health Insurance," Journal of Economics, Springer, vol. 84(3), pages 249-275, May.
    2. Kifmann, Mathias, 2002. "Insuring Premium Risk in Competitive Health Insurance Markets," Beiträge zur Finanzwissenschaft, Mohr Siebeck, Tübingen, edition 1, volume 15, number urn:isbn:9783161477409.
    3. Bradley Herring & Mark Pauly, 2003. "Incentive-Compatible Guaranteed Renewable Health Insurance," NBER Working Papers 9888, National Bureau of Economic Research, Inc.
    4. Frick, Kevin D, 1998. "Consumer Capital Market Constraints and Guaranteed Renewable Insurance," Journal of Risk and Uncertainty, Springer, vol. 16(3), pages 271-278, July-Aug..
    5. Cochrane, John H, 1995. "Time-Consistent Health Insurance," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 445-473, June.
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    Cited by:

    1. Martin Werding & Stuart R. McLennan, 2015. "International Portability of Health-Cost Cover: Mobility, Insurance, and Redistribution," CESifo Economic Studies, CESifo, vol. 61(2), pages 484-519.
    2. Volker Meier, 2006. "Nicht jede Reform ist eine gute Reform: Verfahren zur Übertragung individueller Alterungsrückstellungen in der Privaten Krankenversicherung," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 59(16), pages 21-24, August.
    3. Friedrich Breyer, 2004. "How to Finance Social Health Insurance: Issues in the German Reform Debate," The Geneva Papers on Risk and Insurance, The International Association for the Study of Insurance Economics, vol. 29(4), pages 679-688, October.
    4. Nell, Martin & Rosenbrock, Stephan, 2007. "Wettbewerb in kapitalgedeckten Krankenversicherungssystemen: Ein konsistenter Ansatz zur Übertragung von individuellen Alterungsrückstellungen in der Privaten Krankenversicherung," Working Papers on Risk and Insurance 19, University of Hamburg, Institute for Risk and Insurance.
    5. Martin Nell & Stephan Rosenbrock, 2008. "Wettbewerb in kapitalgedeckten Krankenversicherungssystemen: Ein risikogerechter Ansatz zur Übertragung von Alterungsrückstellungen in der Privaten Krankenversicherung," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 9(2), pages 173-195, May.
    6. Werding, Martin & McLennan, Stuart, 2011. "International portability of health-cost coverage : concepts and experience," Social Protection and Labor Policy and Technical Notes 63929, The World Bank.
    7. Susanna Kochskämper, 2012. "Reformdebatten in der Krankenversicherung vor dem Hintergrund des europäischen Binnenmarktes," Otto-Wolff-Institut Discussion Paper Series 02/2012, Otto-Wolff-Institut für Wirtschaftsordnung, Köln, Deutschland.
    8. Volker Meier, 2005. "Efficient Transfer of Aging Provisions in Private Health Insurance," Journal of Economics, Springer, vol. 84(3), pages 249-275, May.
    9. Marcus C. Christiansen & Martin Eling & Jan-Philipp Schmidt & Lorenz Zirkelbach, 2016. "Who is Changing Health Insurance Coverage? Empirical Evidence on Policyholder Dynamics," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 83(2), pages 269-300, June.
    10. Annette Hofmann & Mark Browne, 2013. "One-sided commitment in dynamic insurance contracts: Evidence from private health insurance in Germany," Journal of Risk and Uncertainty, Springer, vol. 46(1), pages 81-112, February.
    11. Juan Pablo Atal & Hanming Fang & Martin Karlsson & Nicolas R. Ziebarth, 2017. "Exit, Voice or Loyalty? An Investigation into Mandated Portability of Front-Loaded Private Health Plans," NBER Working Papers 23468, National Bureau of Economic Research, Inc.
    12. Christine Arentz & Johann Eekhoff & Susanna Kochskämper, 2012. "Private health insurance: a role model for European health systems," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 13(5), pages 615-621, October.

    More about this item


    health insurance; lifetime contracts; ageing provisions premium insurance; simulations;

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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