The viability of long term care insurance in Kenya
Wanja, Njau Lilian
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Kenya's population aged 60 and above is rapidly ageing. The available facilities catered towards meeting the health care needs of Kenya's ageing population are inadequate and may not be able to manage this growing population.2 additionally, the public facilities available have only the basic outpatient and inpatient facilities which are not sufficient to accommodate the health needs of the population aged 60 and above. On the other hand, the private facilities available in Kenya cover these needs by providing nursing care as well as residential care. However these facilities prove to be overly expensive and can cause a financial burden on the party taking out these services. This research assesses Long Term Care Insurance as an affordable solution to providing the needed health care services for Kenya's ageing population as well as considers the viability of such a scheme in Kenya. This has been done by determining the factors that affect the sustainability of such a product in the Kenyan market. Besides this, an appropriate contribution rate for a suitable LTC! Policy was determined. This was done by using the Markov process through the multi-state model in the pricing of the scheme. This research shows that a long term care insurance scheme is sustainable in Kenya as it can be both affordable and comprehensive in terms of what the benefits can afford the policyholder. Different contribution rates were established for males and females due to their different inherent risk set and needs.