CP 321: Long-duration health assumptions can interact
Morbidity, recovery, mortality, lapse and expenses can affect a long-duration contract together. The direction of a sensitivity depends on the benefit and guarantee structure. Separate a plausible scenario from a statistical percentile.
Original practice scenario
In an original long-term-care scenario, longer claim duration increases benefit payments while lapse assumptions affect premium recovery. Trace both effects and state any dependence assumption. Explain what claim-duration data and segmentation would support a revised recovery assumption.
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.