Homogeneous Discrete Time Alternating Compound Renewal Process: A Disability Insurance Application

<div>A trajectory of a nondiscounted alternating compound renewal process with impulse reward and rate rewards in <svg height="8.68572pt" id="M203" style="vertical-align:-0.0498209pt" version="1.1" viewbox="-0.0498162 -8.6359 8.6074 8.68572" width="8.6074pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M640 650H413L406 622L438 617C475 611 483 605 463 571C422 503 346 400 296 333C264 403 215 529 199 575C189 604 191 614 228 618L262 622L271 650H30L23 622C90 615 97 609 119 553L212 321C222 295 223 285 218 259L193 127C176 39 167 33 82 28L76 0H350L356 28C266 36 257 40 275 127L303 266C308 290 314 302 328 322C396 418 454 493 498 546C551 610 565 616 631 622L640 650Z" id="g113-90"></path><glyph.data ascent="3473" descent="-2876" horiz-adv-x="652" vert-adv-y="652"></glyph.data></g></svg> and only impulse rewards in <svg height="9.01194pt" id="M204" style="vertical-align:-0.04981995pt" version="1.1" viewbox="-0.0498162 -8.96212 9.12937 9.01194" width="9.12937pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M669 636L663 650H260C230 650 221 652 208 675H186C177 621 162 548 144 481L173 479C195 534 211 560 226 578C248 604 266 615 373 615H544C460 511 114 112 23 16L31 0H561C577 34 611 135 622 170L594 182C566 125 544 88 515 65C481 38 416 35 319 35C249 35 197 37 152 41C270 184 542 501 669 636Z" id="g113-91"></path><glyph.data ascent="3473" descent="-2876" horiz-adv-x="692" vert-adv-y="692"></glyph.data></g></svg>. The impulse rewards are variable. <svg height="14.1649pt" id="M205" style="vertical-align:-5.529pt" version="1.1" viewbox="-0.0498162 -8.6359 32.9129 14.1649" width="32.9129pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M962 650H795L470 145L347 650H176L170 622C268 613 275 606 244 503L190 322C150 188 132 126 118 91C102 50 80 33 18 28L12 0H245L251 28C175 35 170 48 174 93C177 128 191 180 220 284L292 542H294C331 392 383 150 409 4H432L774 555H776L714 137C700 40 694 34 612 28L606 0H868L874 28C793 34 784 37 797 137L849 533C859 612 863 616 956 622L962 650Z" id="g113-78"></path><glyph.data ascent="3473" descent="-2876" horiz-adv-x="985" vert-adv-y="985"></glyph.data></g><g transform="matrix(.0091,0,0,-0.0091,12.22,3.132)"><path d="M400 606C400 634 383 656 353 656C316 656 294 620 294 593C294 564 317 545 343 545C375 545 400 573 400 606ZM366 351C379 413 381 451 356 451C323 451 251 408 183 341L199 313C223 335 267 365 277 365C285 365 284 354 277 312C245 132 222 27 193 -100C182 -148 160 -188 131 -188C113 -188 90 -178 75 -170C64 -164 55 -168 48 -175C38 -185 24 -203 24 -222S48 -257 71 -257C89 -257 131 -241 186 -192C243 -141 286 -46 310 74L366 351Z" id="g50-107"></path><glyph.data ascent="3443" descent="-2856" horiz-adv-x="430" vert-adv-y="430"></glyph.data></g><g transform="matrix(.0091,0,0,-0.0091,16.134,3.132)"><path d="M98 134C72 134 46 117 46 90C46 73 55 65 60 64C95 55 124 32 124 -4C124 -42 95 -68 44 -89L57 -123C122 -104 194 -60 194 22C194 94 136 134 98 134Z" id="g50-45"></path><glyph.data ascent="3443" descent="-2856" horiz-adv-x="237" vert-adv-y="237"></glyph.data></g><g transform="matrix(.0091,0,0,-0.0091,18.29,3.132)"><path d="M400 606C400 634 383 656 353 656C316 656 294 620 294 593C294 564 317 545 343 545C375 545 400 573 400 606ZM366 351C379 413 381 451 356 451C323 451 251 408 183 341L199 313C223 335 267 365 277 365C285 365 284 354 277 312C245 132 222 27 193 -100C182 -148 160 -188 131 -188C113 -188 90 -178 75 -170C64 -164 55 -168 48 -175C38 -185 24 -203 24 -222S48 -257 71 -257C89 -257 131 -241 186 -192C243 -141 286 -46 310 74L366 351Z" id="g50-107"></path><glyph.data ascent="3443" descent="-2856" horiz-adv-x="430" vert-adv-y="430"></glyph.data></g><g transform="matrix(.0091,0,0,-0.0091,22.204,3.132)"><path d="M556 236V289H56V236H556Z" id="g54-33"></path><glyph.data ascent="3443" descent="-2856" horiz-adv-x="611" vert-adv-y="611"></glyph.data></g><g transform="matrix(.0091,0,0,-0.0091,27.764,3.132)"><path d="M389 0V32C297 37 291 46 291 118V635C234 612 176 595 109 583V556L161 554C203 551 207 548 207 497V118C207 46 201 37 110 32V0H389Z" id="g58-47"></path><glyph.data ascent="1007" descent="-369" horiz-adv-x="487" vert-adv-y="487"></glyph.data></g></svg> represent the total value of the <svg height="14.1649pt" id="M206" style="vertical-align:-5.529pt" version="1.1" viewbox="-0.0498162 -8.6359 11.6631 14.1649" width="11.6631pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M640 650H413L406 622L438 617C475 611 483 605 463 571C422 503 346 400 296 333C264 403 215 529 199 575C189 604 191 614 228 618L262 622L271 650H30L23 622C90 615 97 609 119 553L212 321C222 295 223 285 218 259L193 127C176 39 167 33 82 28L76 0H350L356 28C266 36 257 40 275 127L303 266C308 290 314 302 328 322C396 418 454 493 498 546C551 610 565 616 631 622L640 650Z" id="g113-90"></path><glyph.data ascent="3473" descent="-2876" horiz-adv-x="652" vert-adv-y="652"></glyph.data></g><g transform="matrix(.0091,0,0,-0.0091,7.111,3.132)"><path d="M400 606C400 634 383 656 353 656C316 656 294 620 294 593C294 564 317 545 343 545C375 545 400 573 400 606ZM366 351C379 413 381 451 356 451C323 451 251 408 183 341L199 313C223 335 267 365 277 365C285 365 284 354 277 312C245 132 222 27 193 -100C182 -148 160 -188 131 -188C113 -188 90 -178 75 -170C64 -164 55 -168 48 -175C38 -185 24 -203 24 -222S48 -257 71 -257C89 -257 131 -241 186 -192C243 -141 286 -46 310 74L366 351Z" id="g50-107"></path><glyph.data ascent="3443" descent="-2856" horiz-adv-x="430" vert-adv-y="430"></glyph.data></g></svg> rewards and <svg height="14.1649pt" id="M207" style="vertical-align:-5.529pt" version="1.1" viewbox="-0.0498162 -8.6359 22.8837 14.1649" width="22.8837pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M962 650H795L470 145L347 650H176L170 622C268 613 275 606 244 503L190 322C150 188 132 126 118 91C102 50 80 33 18 28L12 0H245L251 28C175 35 170 48 174 93C177 128 191 180 220 284L292 542H294C331 392 383 150 409 4H432L774 555H776L714 137C700 40 694 34 612 28L606 0H868L874 28C793 34 784 37 797 137L849 533C859 612 863 616 956 622L962 650Z" id="g113-78"></path><glyph.data ascent="3473" descent="-2876" horiz-adv-x="985" vert-adv-y="985"></glyph.data></g><g transform="matrix(.0091,0,0,-0.0091,12.22,3.132)"><path d="M400 606C400 634 383 656 353 656C316 656 294 620 294 593C294 564 317 545 343 545C375 545 400 573 400 606ZM366 351C379 413 381 451 356 451C323 451 251 408 183 341L199 313C223 335 267 365 277 365C285 365 284 354 277 312C245 132 222 27 193 -100C182 -148 160 -188 131 -188C113 -188 90 -178 75 -170C64 -164 55 -168 48 -175C38 -185 24 -203 24 -222S48 -257 71 -257C89 -257 131 -241 186 -192C243 -141 286 -46 310 74L366 351Z" id="g50-107"></path><glyph.data ascent="3443" descent="-2856" horiz-adv-x="430" vert-adv-y="430"></glyph.data></g><g transform="matrix(.0091,0,0,-0.0091,16.134,3.132)"><path d="M98 134C72 134 46 117 46 90C46 73 55 65 60 64C95 55 124 32 124 -4C124 -42 95 -68 44 -89L57 -123C122 -104 194 -60 194 22C194 94 136 134 98 134Z" id="g50-45"></path><glyph.data ascent="3443" descent="-2856" horiz-adv-x="237" vert-adv-y="237"></glyph.data></g><g transform="matrix(.0091,0,0,-0.0091,18.29,3.132)"><path d="M400 606C400 634 383 656 353 656C316 656 294 620 294 593C294 564 317 545 343 545C375 545 400 573 400 606ZM366 351C379 413 381 451 356 451C323 451 251 408 183 341L199 313C223 335 267 365 277 365C285 365 284 354 277 312C245 132 222 27 193 -100C182 -148 160 -188 131 -188C113 -188 90 -178 75 -170C64 -164 55 -168 48 -175C38 -185 24 -203 24 -222S48 -257 71 -257C89 -257 131 -241 186 -192C243 -141 286 -46 310 74L366 351Z" id="g50-107"></path><glyph.data ascent="3443" descent="-2856" horiz-adv-x="430" vert-adv-y="430"></glyph.data></g></svg> the total value of the <svg height="14.4911pt" id="M208" style="vertical-align:-5.52898pt" version="1.1" viewbox="-0.0498162 -8.96212 13.4899 14.4911" width="13.4899pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M669 636L663 650H260C230 650 221 652 208 675H186C177 621 162 548 144 481L173 479C195 534 211 560 226 578C248 604 266 615 373 615H544C460 511 114 112 23 16L31 0H561C577 34 611 135 622 170L594 182C566 125 544 88 515 65C481 38 416 35 319 35C249 35 197 37 152 41C270 184 542 501 669 636Z" id="g113-91"></path><glyph.data ascent="3473" descent="-2876" horiz-adv-x="692" vert-adv-y="692"></glyph.data></g><g transform="matrix(.0091,0,0,-0.0091,8.931,3.132)"><path d="M400 606C400 634 383 656 353 656C316 656 294 620 294 593C294 564 317 545 343 545C375 545 400 573 400 606ZM366 351C379 413 381 451 356 451C323 451 251 408 183 341L199 313C223 335 267 365 277 365C285 365 284 354 277 312C245 132 222 27 193 -100C182 -148 160 -188 131 -188C113 -188 90 -178 75 -170C64 -164 55 -168 48 -175C38 -185 24 -203 24 -222S48 -257 71 -257C89 -257 131 -241 186 -192C243 -141 286 -46 310 74L366 351Z" id="g50-107"></path><glyph.data ascent="3443" descent="-2856" horiz-adv-x="430" vert-adv-y="430"></glyph.data></g></svg> rewards.</div>

Mathematical Problems in Engineering

fig4

Figure 4

Figure 4: Homogeneous Discrete Time Alternating Compound Renewal Process: A Disability Insurance Application 