We study the impact of housing wealth and individual preferences on demand for annuities long-term care insurance (LTCI). build a multi-state lifecycle model that includes longevity risk health shocks. The preference is represented by recursive utility function separates aversion elasticity intertemporal substitution (EIS). When shocks are considered, higher level lowers annuity demand, while l...

We show that, as soon there exists a positive bequest motive, sufficiently risk averse individuals should not purchase annuities. This suggests therefore a new explanation for the low level of annuitization, which is valid even if one assumes perfect markets. A model calibration accounting for temporal risk aversion generates an optimal level of annuitization of only 25% of the total savings.

/RÉSUMÉ National annuity markets: features and implications This paper describes a number of national annuity markets, the types of products typically available, the demand for these products, the value for money on offer and the dynamics of the supply side. It explores supply and demand characteristics, asking what the main forces are that drive these dynamics and how they might be recognised ...

In this paper we investigate a special type of annuity where the annuity is issued to a policyholder who is in reasonable health at the outset; however, if the policyholder subsequently becomes disabled then the annuity payments are increased to a higher level depending on the level of disability. We analyse different types of disability-linked annuities, both single life and last survivor, in ...

The Money’s Worth Ratio (MWR) measures an annuity’s actuarial fairness. It is calculated as the discounted present value of the annuity’s expected future payments divided by its cost. We argue that, this measure may overestimate the value‐for‐money obtained by annuitants, since it does not adjust for liquidity or risk factors. Measuring these factors is challenging, requi...

It is well known that accurate forecasts of mortality rates are essential to various demographic research like population projection, and the pricing insurance products such as pensions annuities. Recent studies suggest multivariate ages usually not leading indicators in forecasting. Therefore, stochastic models including classic Lee–Carter may necessarily lead more forecasts, compared with sop...

We construct an optimal investment portfolio model for individual investor saving in a retirement plan. The earns stochastic labour income with both permanent and temporary shocks, has access to equity, conventional bond, inflation-indexed bond cash, as well two types of deferred annuities: nominal inflation-protected. objective function consists power utility terms real from the annuities bequ...