Research On Tax-deferred Pension Insurance Based On The Markov Chain Property

The number of premium income and claim are related to the health status of person,and the markov chain can well simulate the random characteristics that people change amount the various states.The pricing model,profit testing model,personal life-long utility model and tax loss model with multi-state markov chain are constructed to comprehensively evaluate the impact of tax-deferred pension policy on insurance companies,individuals and government.And the comprehensive impact is referred to the social welfare effect.By comparing the profit situation of insurance companies,the increased quantity of individuals’ lifelong utility and the tax loss amount of the government,the decision on whether popularizing the tax-deferred pension policy can be made.First of all,the pricing model and profit testing model based on the nature of markov chain were established.By doing some numerical demonstration with matlab programme,it was found that reasonable pricing,tax-deferred pension insurance business could bring positive profits for insurance companies,and insurance companies were motivated to develop this business.Secondly,the influence about the effect of preferential tax policy when health states change is analysed by building a intertemporal effectiveness model based on the Markov chain and adding the health and time status.The investigations found that people’s willingness of consuming tax-deferred commercial pension insurance is weakended due to the deteriorating health and short life expectancy.Here,not follow the say that tax-deferred pension insurance is taken as a useful policy to improve person’s utility for it reducing the expenses for person’s tax and increasing the disposable personal income after retirement.To enhance the life-long utility,rational people would like to buy tax-deferred commercial pension insurance because they can realize the benefit at present and of the future.But actually,not all rational people would do that.Individuals who lives shorter or even die before retirement can receive little pension that makes the effectiveness decrease,so the decision whether rational people buy the commercial pension is given by estimating their life remaining.So,in order to promote the universal implementation of the tax deferment pension insurance policy,a minimum guarantee to these people is needed when the policy is being formulated by government and the products being designed by companies.Finally,a tax loss model with the character of Markov chain is established,considering the trend of government’s tax loss which changes for person’s health status after the tax-deferred policy being implemented,comparing with the more pension that encouraged by implementing Tax-deferred policy,and discussing it by combining with the financial loss that caused by the increased pension which is borne by the government.A conclusion is arrived at last that positive social welfare effect can be brought about by implementing the tax-deferred policy,and the government should continue to promote the tax-deferred pension policy.