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Effect of Multiple-Life Insurance Benefits on Expected Contract Liabilities

Abstract

Multiple-life insurance provides coverage for two or more insured lives under a single insurance arrangement, with benefits determined by specified conditions relating to the lives covered. Such contracts may involve joint-life, last-survivor, or other multiple-life benefit structures. The number of lives covered and the timing of benefit payments can influence the expected financial obligations of insurers, making accurate actuarial valuation important for determining contract liabilities. This study will examine the effect of multiple-life insurance benefits on expected contract liabilities. It will assess the extent to which variations in the structure and amount of benefits payable under multiple-life insurance contracts influence the expected liabilities of insurers. The study will also examine how the survival and mortality patterns of multiple insured lives affect the valuation of future contractual obligations. The study will focus on multiple-life benefit amounts, joint-life probabilities, last-survivor probabilities, policy duration, mortality assumptions, interest rate assumptions, and expected contract liabilities. Actuarial techniques will be applied to estimate the present value of expected benefits under different multiple-life insurance structures. The analysis will consider how changes in benefit amounts and payment conditions influence the level of liabilities recognised for the insurance contracts. A quantitative research approach will be adopted for the study. Relevant mortality data, policy parameters, benefit structures, and actuarial assumptions will be analysed using life table functions, joint-life and last-survivor actuarial models, actuarial present value techniques, and scenario analysis. Different multiple-life benefit arrangements will be modelled to estimate corresponding contract liabilities. The resulting estimates will be compared to determine the effect of benefit structures on expected insurance liabilities. The study is expected to reveal that variations in multiple-life insurance benefit structures may produce significant differences in expected contract liabilities. Higher benefit amounts and benefit structures requiring payments following specified events involving multiple insured lives may increase expected liabilities. The findings may also indicate that mortality dependence, age differences between insured lives, policy duration, and interest rate assumptions can influence the magnitude of the estimated liabilities. The study will be useful to actuaries, life insurance companies, underwriters, regulators, and researchers. It may assist insurers in improving the valuation and management of multiple-life insurance liabilities and in developing appropriate pricing and reserving procedures. The findings may also support more accurate assessment of the financial implications of different multiple-life benefit structures. The study concludes that multiple-life insurance benefits can influence expected contract liabilities through their effects on the timing, amount, and probability of future benefit payments. It is therefore recommended that insurers incorporate appropriate multiple-life actuarial models, mortality assumptions, and benefit structures when estimating contract liabilities to ensure reliable and consistent insurance valuation.

Keywords: Multiple-life insurance, expected contract liabilities, life insurance benefits, joint-life insurance, last-survivor insurance, actuarial valuation, insurance liabilities, mortality assumptions, joint-life probabilities, survival probabilities, actuarial present value, policy duration, benefit valuation, life insurance contracts, actuarial modelling.