"Longlife insurance" combines nursing home, home health, and deferred annuity benefits. It costs less than life care, allows the elderly to remain in their own homes, and protects assets. Adverse selection is limited because the plan is attractive to both frail and healthy elders. An analysis of 18,600 respondents in the Social Security Administration's New Beneficiary Survey indicates that 67 ...

a r t i c l e i n f o Studies examining pension distribution choices have found that the tendency of private-sector workers is to select lump sum distributions instead of life annuities resulting in leakage of retirement savings. In the public sector, defined benefit pensions usually offer lump sum distributions equal to employee contributions, not the present value of the annuity. Thus, for te...

Abstract Dynamic hybrid products emerged in 2007 and are now well established the German life insurance market. In this article, we study interaction effects between dynamic traditional deferred annuity contracts, that sold by same company. The key question investigate is whether presence of has a negative effect on payout products. We do so using data drawn from Monte Carlo simulation based mo...

The Japanese life insurance industry developed through the 1980s in a stable manner, supported by the high growth of domestic economy. The business in force including individual annuity and group insurance exceeded 1,300 trillion yen. In 1987, the United States was already replaced by Japan as the No. 1 nation by the insurance in force. Subsequently, the in-force insurance ratio of the national...

This paper surveys the main concepts and techniques of recent developments in the modeling of the term structure of interest rates that are used in the risk management and valuation of interest-rate-dependent cash flows. These developments extend the concepts of immunization and matching to a stochastic interest rate environment. Such cash flows include the cash flows on assets such as bonds an...

We provide a self-contained analysis of a class of continuous-time stochastic mortality models that have gained popularity in the last few years. We describe some of their advantages and limitations, examining whether their features survive equivalent changes of measures. This is important when using the same model for both market-consistent valuation and risk management of life insurance liabi...

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...