CP 321: Disability models need recovery and death transitions
A disability cash flow depends on whether a claimant remains disabled, recovers or dies. Duration in state and benefit provisions can matter. A single probability of entering disability does not value the whole benefit stream.
Original practice scenario
For an original monthly model, track opening disabled lives, recoveries, deaths and continuing claims. Attach payments to the appropriate state and timing. Explain why a year-end occupancy probability may miss payments made earlier during claims that later recovered.
Study check
Write the assumptions, the decision being supported and one limitation. Use the current course syllabus for the required terminology and scope; this introductory guide is not a complete course summary.
Reading sources
ActNet editorial guide · October 1, 2026 · Original illustrative examples.