Cox-Based Estimation Model for Critical Illness Insurance Policy for Breast Cancer Based on the Possible Transition of Status

Breast cancer treatment involves complex medical procedures with high costs. These high costs highlight the need for adequate insurance coverage. In Indonesia, most cancer insurance schemes offer lump sum payouts upon diagnosis. In this study, we develop a cancer insurance scheme that provides benefits for patients who need extended treatment periods until they are declared cancer-free. This scheme is based on the possible transitions in the status of breast cancer patients, considering factors such as patient age, cancer stage and comorbidities. The time-homogeneous Cox Markov model is used to assess the impact of various covariates on patient status transitions and estimate the transition intensities between patient statuses. The proposed models and methods are then applied to data from patients with breast cancer at Dr. Sardjito Hospital, Yogyakarta, Indonesia. The application of the model to the data indicates that premiums for both stand-alone benefit and endowment benefit cancer insurance policies tend to be higher for older patients, those in advanced stages and those with hypertension. This developed model is a valuable method for insurance companies to estimate the probability of treatment status transitions and insurance premium rates in breast cancer patients, as well as to develop new insurance products that are critically needed by patients.