Abstract:

The article proposes a new product program—long-term care insurance with embedded reverse mortgage option, and gives its pricing model. Moreover, the article simulations the contract fees of insurance product and amounts of insurance payments yearly by making use of existing real estate prices, interest rates and mortality data. The result shows that comparing with a single long-term care insurance, this product can provide for the disable elderly an income at relatively low contract costs, and can keep the housing tenure.