Multiple Decrement Models

In some life insurance policies, benefit to a single life or a group is subject to a type of contingency. For example, the death of an individual may be due to an accident or due to any other cause. In most of the insurance policies the coverage is first given for the base cause, and then there are policy riders for additional benefits. If the death is due to an accident, then the benefit structure is different, and usually the benefit is more than the base coverage. In such cases, the benefit structure and consequently the premium structure depend on time to death as well as on the cause of death. Survivorship models incorporating two random mechanisms, time to termination, and various modes of termination are known as multiple decrement models. Chapter 1 introduces multiple decrement model and the construction of multiple decrement table. Section 1.2 discusses the joint distribution theory of time to decrement and cause of decrement random variables with several illustrative examples. The highlight of the book is its usage of R software for statistical computations. R software is freely available from public domain. A brief introduction of R software is given in the second section, and R code is used for all the computations in subsequent chapters. Sections 1.3 and 1.4 are devoted to the construction of multiple decrement table, using associated single decrement model and central rate bridge. R commands are given for the construction of multiple decrement table.