Modelling and computer simulation of an insurance policy: A search for maximum profit
M. Acharyya (Krishnanagar Govt. College), A. B. Acharyya (Hooghly, Mohsin College)
TL;DR
This paper presents a computer simulation model for a life insurance policy that identifies the age at which net gain is maximized, providing insights into optimal policy parameters.
Contribution
It introduces a novel simulation-based approach to determine the optimal upper age for last premium in life insurance policies.
Findings
Net gain peaks at a specific upper age of last premium
Simulation results identify the optimal age for maximum profit
Model applicable to different lifetime distributions
Abstract
We have developed a model for a life insurance policy. In this model the net gain is calculated by computer simulation for a particular type of lifetime distribution function. We observed that the net gain becomes maximum for a particular value of upper age of last premium. This paper is dedicated to Professor Dietrich Stauffer on the occassion of his 60-th birthday.
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Taxonomy
TopicsInsurance, Mortality, Demography, Risk Management