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Transferable Ageing Provisions in Individual Health Insurance Contracts

Author

Listed:
  • Florian Baumann
  • Volker Meier

    ()

  • Martin Werding

Abstract

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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    File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp1116.pdf
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    References listed on IDEAS

    as
    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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    More about this item

    Keywords

    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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