Abstract
Home reversion plans allow homeowners to tap into the value of their house and live in it until their death. The article considers a contract linking home reversion plan and long-term care insurance, which could better prepare seniors for their retirement and long-term care needs. Here, we assume the product exposes an insurer to two risks: the uncertainty of nursing care cost from disable, and the home value decreasing in real estate markets at the time of sale. Because the market is incomplete, we apply the principle of equivalent utility to price the contract under exponential utility.
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