Reply To: Lapse Assumption

Actuary Forums › Forums › Actuarial Discussions › General Topics › Lapse Assumption › Reply To: Lapse Assumption

December 25, 2018 at 7:16 am #24361
sohamw97
Participant

    nikhiltalwar wrote:

    I have a question regarding lapse assumption and skew  lapse patterns

    i have a life insurance model which gives me lapse rates and then distribution of lapse rate over the whole of the year(example 25% people lapsing at end of 12 th month and rest 75% lapsing equally over 11 months).

    However the mode of premium is annual.

    i am struggling to think of the reason why would a policy after paying annual premium would lapse at any other months apart from next policy year (or the end of 12th month)

    why do we need lapse pattern for rest of 11 months

     

    Can you specify more? As in how did you arrive at the lapse rates?

    Sent from my Moto G (4) using Actuarial Info mobile app