Research Article

INTEGRATING CHRONIC HEALTH RISK FACTORS INTO PENSION LIABILITY AND MORTALITY ANALYSIS

OGWU KINGSLEY JOEL1*, Imoseme Marian Izedomi2
1 Confluence university of science and technology, Osara
2 Department of Actuarial Science & Insurance, University of Benin, Nigeria
* Corresponding author: Kingsleyogwu194@gmail.com
Published: Apr, 2025
Pages: 73-83

Abstract

This study examines how chronic health conditions influence pension liabilities by modeling long-term mortality risks associated with diseases such as cardiovascular disease, diabetes, and respiratory illnesses. Using a hypothetical dataset based on actuarial principles and mortality tables, it simulates the impact of these conditions on mortality rates and pension obligations under different interest rate scenarios (5%, 4.5%, 4%, and 3.5%). Results indicate that individuals with chronic illnesses face higher premiums, especially with cardiovascular disease, yet often result in lower pension liabilities due to reduced life expectancy. Respiratory diseases show a more balanced effect. The findings highlight a key trade-off: while chronic conditions increase short-term costs, they decrease long-term liabilities. The study underscores the importance of incorporating health data into actuarial models to improve mortality projections and financial planning for pension schemes, preventing underestimation of future liabilities. Recommendations include integrating health information, updating mortality assumptions regularly, and adopting policies to address the rising burden of chronic diseases in aging populations.

Keywords

Pension liabilities Chronic health conditions Mortality risk Financial planning

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How to Cite

JOEL, O. K., & Izedomi, I. M. (2025). INTEGRATING CHRONIC HEALTH RISK FACTORS INTO PENSION LIABILITY AND MORTALITY ANALYSIS. Nigerian Actuarial Journal, 2(1), 73-83.

O. K. JOEL, and I. M. Izedomi, "INTEGRATING CHRONIC HEALTH RISK FACTORS INTO PENSION LIABILITY AND MORTALITY ANALYSIS," Nigerian Actuarial Journal, vol. 2, no. 1, pp. 73-83, April 2025.

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