In enhanced annuities, the annuity payment depends on one’s state of health at some contracted date while in ”standard annuities”, it does not. The focus of this paper is on an annuity market where ”standard” and enhanced annuities are offered simultaneously. When all insured know equally well on their future health status either enhanced annuities drive standard annuities out of the market or ...

In this paper, ambiguity aversion to uncertain survival probabilities is introduced in a life-cycle model with a bequest motive to study the optimal demand for annuities. Provided that annuities return is sufficiently large, and notably when it is fair, positive annuitization is optimal in the ambiguity neutrality limit case. Conversely, the optimal strategy is to sell annuities in case of infi...

This paper analyzes an individual’s post retirement longevity risk management strategy allowing for systematic longevity risk, recent product innovations, and product loadings. A complete-markets discrete state model and multi-period simulations of portfolio strategies are used to assess individual longevity insurance product portfolios with differing levels of systematic and idiosyncratic long...

Decisions about life annuities are an important part of consumer decumulation of retirement assets, yet they are relatively underexplored by marketing researchers studying consumer financial decision making. In this article, the authors propose and estimate a model of individual preferences for life annuity attributes using a choice-based statedpreference survey. Annuities are presented in term...

003 Some researchers have raised concerns about significant volatility in init l payments from fixed immediate life annuities and the subsequent inflation risk dur g the retirement period. This paper investigates these concerns using recent high frequency data. It finds that while there is significant volatility in initial payments from no inal fixed annuities, phased purchases of fixed annuiti...

Because life annuities can increase the level and decrease the volatility of lifetime consumption, economists have long been puzzled by the low demand for life annuities. One potential rational explanation is that adverse selection drives up life annuity prices, which drives down demand. We study the choice between life annuities and lump sums made by 32,000 retiring public employees. These uni...

This paper derives optimal equity-bond-annuity portfolios for retired households who face stochastic capital market returns, differential exposures to mortality risk and uncertain uninsured health expenses, and differential Social Security and defined benefit pension coverage. The results show that the health spending risk drives household portfolios to shift from risky equities to safer assets...

The Chilean Electronic Market for Annuities was created in 2004 in order to correct several malfunctions of the market for annuities. The Chilean Pension System is composed of two phases. On the accumulation phase, savings are collected and managed by asset managers. The payout phase consists in pension payments mainly in the form of annuities and programmed withdrawals. The market for annuitie...

We use a payment pattern of the type {1k,2k,3k,…} to generalize standard level and increasing annuity polynomial patterns. derive explicit formulas for present value an n-year annuity, m-monthly continuous annuity. also idea extend annuities patterns derived from analytic functions, as well {1r,2r,3r,…}, with r being arbitrary real number. In process, we develop possible approximations k! gamma...