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Pricing Critical Illness Insurance Premiums Using Multiple State Continous Markov Chain Model
Pasaribu U.S.a, Husniah H.b, Sari R.R.K.N.a, Yanti A.R.a
a Department of Mathematics and Life Science, Bandung Institute of Technology, Bandung, Indonesia
b Department of Industrial Engineering, Langlangbuana University, Bandung, Indonesia
[vc_row][vc_column][vc_row_inner][vc_column_inner][vc_separator css=”.vc_custom_1624529070653{padding-top: 30px !important;padding-bottom: 30px !important;}”][/vc_column_inner][/vc_row_inner][vc_row_inner layout=”boxed”][vc_column_inner width=”3/4″ css=”.vc_custom_1624695412187{border-right-width: 1px !important;border-right-color: #dddddd !important;border-right-style: solid !important;border-radius: 1px !important;}”][vc_empty_space][megatron_heading title=”Abstract” size=”size-sm” text_align=”text-left”][vc_column_text]© Published under licence by IOP Publishing Ltd.Critical Illness Insurance is an insurance product with a lump sum benefit or cash payment if the policyholder is diagnosed with critical illness in an insurance contract. The health state change process can be observed and modeled by a multi-state Markov Chain with a time-continuous parameter. In this article, we will illustrate how the mathematics of Markov Chain can be used to develop a model of state change in critical illness in the case of a cancer patient. Health state changes process in critical illness modeled by four states Markov chain. Using transition probability which is based on transition intensity of continuous Markov chain. We will estimate the transition intensity and used it in a differential equation of transition probability. The application of Markov chain model will be used to estimate the value of the premiums in some of critical illness insurance benefit model. The premiums value will be shown in the table in section five.[/vc_column_text][vc_empty_space][vc_separator css=”.vc_custom_1624528584150{padding-top: 25px !important;padding-bottom: 25px !important;}”][vc_empty_space][megatron_heading title=”Author keywords” size=”size-sm” text_align=”text-left”][vc_column_text]Cancer,Insurance premiums,Multiple state,Transition intensity,Transition probabilities[/vc_column_text][vc_empty_space][vc_separator css=”.vc_custom_1624528584150{padding-top: 25px !important;padding-bottom: 25px !important;}”][vc_empty_space][megatron_heading title=”Indexed keywords” size=”size-sm” text_align=”text-left”][vc_column_text]Cancer,Continous Markov chain,Critical illness insurance premium,Multiple state model,Transition intensity,Transition probability[/vc_column_text][vc_empty_space][vc_separator css=”.vc_custom_1624528584150{padding-top: 25px !important;padding-bottom: 25px !important;}”][vc_empty_space][megatron_heading title=”Funding details” size=”size-sm” text_align=”text-left”][vc_column_text][/vc_column_text][vc_empty_space][vc_separator css=”.vc_custom_1624528584150{padding-top: 25px !important;padding-bottom: 25px !important;}”][vc_empty_space][megatron_heading title=”DOI” size=”size-sm” text_align=”text-left”][vc_column_text]https://doi.org/10.1088/1742-6596/1366/1/012112[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/4″][vc_column_text]Widget Plumx[/vc_column_text][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row][vc_column][vc_separator css=”.vc_custom_1624528584150{padding-top: 25px !important;padding-bottom: 25px !important;}”][/vc_column][/vc_row]