A model that provides medical cover to policy holders when they reach the retirement age
Abstract
The entire project was based on an objective to design medical insurance
product that covers the medical expenses of persons above the retirement
age (60) upon outpatient and inpatient medical services and is affordable to
the insured having paid premiums before retirement.
Premium calculation technique was used as various actuarial computations
were carried out to determine the premium for different ages. The key
assumptions made include; Interest rate, charges, Ugandan mortality rates
and Expenses.
The premium calculating technique helped to determine the premiums of
different ages for every gender.
From the above, a premium calculating technique was adapted in doing
actuarial calculation in MS excel and VBA to yield premiums at particular
given age.
From the results, it is observed that premium increases gradually with age
from 20 to 40, and exponentially from ages 41 to 59.
The results of the sensitivity analysis show that a slight change in interest
rate and expenses greatly affects the premium amount thus are the most
sensitive assumptions.
In conclusion, the product is affordable for younger ages up to age 46.
However, two assumptions namely interest rate and expense rate should be
monitored frequently because they are so sensitive to amount of premium to
be paid upon small changes. The recommendation from me is that
consideration should be made for a medical insurance for one to be covered
in their retirement age having paid the premiums during their active age.