The effect of dependence on life insurance
The effect of dependence on life insurance

Summary/Abstract: In the classical life insurance it is assumed that the risks are independent. This assumption is not appropriate in many practical situations. For example the lifelengths of two insured persons (such as a husband and a wife) are dependent because they share a common way of life and more or less are exposed to the same risks. In the case of the group life insurance for persons that work for the same company, the mortality is dependent on a certain event (i.e. explosion, breakdown). In this paper models for modelling the dependence will be presented. The influence of the dependence on the aggregate claims distribution and the net premium in the life insurance will be demonstrated on numerical examples.

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