Lognormal and log-logistic distribution mixture analysis and application

Abstract

In this paper, we analyze a mixture of Lognormal and Log-Logistic distribution. We estimate the parameters of the introduced distribution by using the expectation-maximization (EM) algorithm. Various phenomena in the field of medicine and economy could be modeled by this mixture. In this paper, it is used to construct new mortality model for determining the unisex premium rates in life insurance. The application of the model is illustrated in the case of Serbian population and its advantages are presented in the context of life insurance premium calculation.