CALCULATION OF COUPLE TERM LIFE INSURANCE PREMIUM USING COPULA CLAYTON JOINT DISTRIBUTION AND VASICEK INTEREST RATE

• Main Author: Akhirul Ramadhan, Muhammad
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/77392
• Institution: Institut Teknologi Bandung

Joint life insurance is an insurance product that involves two or more individuals in the same policy, with insurance benefits provided when one of the individuals passes away during the coverage period. This research aims to develop a method for calculating premiums for couple term insurance by combining the Vasicek interest rate and survival model using the Clayton Copula. The Vasicek interest rate is used to model interest rate fluctuations, while the Clayton Copula is used to model the dependence between the lifetimes of the individuals involved in the policy, namely a husband-and-wife pair. In this study, the data used to model interest rate fluctuations is the Bank Indonesia interest rate data, while the Indonesian Mortality Table IV and Indonesian Morbidity Table I are used for the survival model. The premium calculation results show that selecting the Vasicek interest rate with an average yield leads to premium calculations that tend to be larger than premiums calculated using randomly selected Vasicek interest rates. Based on the decreasing level of dependence between spouses, the results indicate that the calculation of joint life term insurance premiums becomes larger compared to higher levels of dependence. Furthermore, the selection of the age combination of the husband and wife also explains the influence of the level of spousal dependence on the premium of joint life term insurance and individual premiums. In cases where the husband's age is greater than or equal to the wife's age, an increasing level of spousal dependence causes joint life term insurance premiums to converge to the value of individual male premiums. However, when the wife's age is older than the husband's age, the joint life term insurance premium intersects with the individual premium at a certain level of dependence and a small age difference. In general, the selection of the age combination of the husband and wife will not cause joint life term insurance premiums to be larger than individual male premiums