2023 Australasian Actuarial Education and Research Symposium

Xingying Yu

UNSW

Modelling joint life functional disability and mortality

This is joint work with Kyu Park, Jonathan Ziveyi, Michael Sherris, Yang Shen

Our research investigate the dependence between the health states of married couples, along with the variables of age, gender, and time. We develop a 3-state Markov health transition model and estimate four models, incorporating terms to capture the dependence of health states between couples. Our results indicate that models with mortality and disability dependence terms provide a better fit to the data. Spouses' disability and death have significant impacts on health transitions, and the effects gradually decrease over time. Spouses' deaths increase mortality rates, while spouses' disability increase disability rates. The negative impact caused by bereavement effect of spouses' deaths on mortality rates for males is greater than those for females. Incorporating the frailty term has further augmented the goodness of fit of the model. Our model has practical implications for joint long-term care insurance pricing.