Research On Financial Feasibility Of The Long-term Care Insurance

With the population aging and the development of family miniaturization trend, Aged care services demand will continue increasing. Establishing and perfecting social service system for the aged will become an important strategic task in our country. A series of elements including service providers, facilities, technology, service standards and capital are the guarantee for the development of social service. This paper will focus on the process of financing. According to international experience, some countries raised funds through the establishment of the long-term care insurance system. Recently,China’s academia and industry have made up advices of developing long-term care insurance, but existing research focused on the qualitative level and lack of quantitative analysis, so it makes it difficult to answer the problem whether we can organize long-term care insurance. This paper assume that we establish long-term care insurance system in social insurance way in our country, then study the long-term care insurance rates through life insurance actuary model. Try to provide the reference by studying operation cost for long-term care insurance, the capacity of fund raisers and the feasibility of the system.This paper starts from long-term care insurance system of the positioning and further analysis pay level according to international experience and pension costs data, then establish vertical balance rate model on the basis of life insurance actuarial theory. Specifically, firstly, calculate the cost by using horizontal balance model, then parameter hypothesis calculation in three payment standards at the age of 40,50,55,60 and 70. At last, establish the cost allocation model based on the actuarial present value equivalence principle and analyze the financing subjects employing units and the burden of fund raisers. The results show that this system can’t be established in China now. In the last part, we give policy advisements about how to develop LTCI in China and find some places to improve our research.