英文摘要 |
Reverse mortgage plans (RM) allow the elderly (borrowers) to employ their own real estate as both housing and a financing instrument throughout their life span. As the RM expires, the bank (lender) is entitled to lodge a claim on the discrepancy if the loan balance is greater than the house value with the insurance company (IC). Our contribution is threefold. First of all, we use the Taiwan Life Expectancy Database and simulated house prices and interest rates from stochastic processes to estimate the constant annuity and the maximum loan to value. Secondly, we build a simulation model for insurance premium rates, which are charged by the IC to the lender and determined under the condition where the present value of expected claim losses is equal to that of the insurance premiums. Finally, we analyze the impact of the disposition time of RM collateral on insurance premiums based on our simulation results. Our paper can shed light on the implementation and further development of reverse mortgage plans in Taiwan. |