In many developed countries house prices have been rising rapidly, mortgage debt has been increasing and affordability has worsened. It is in this context that the standard annuity mortgage is increasingly being supplanted by mortgages with nonstandard features, such as longer terms or interest-only payments. Many of these new features aim to reduce the borrower’s monthly debt service in the in...

Understanding the Economic Consequences of Shifting Trends in Population Health The public economic burden of shifting trends in population health remains uncertain. Sustained increases in obesity, diabetes, and other diseases could reduce life expectancy − with a concomitant decrease in the public-sector’s annuity burden − but these savings may be offset by worsening functional status, which i...

In pricing joint last survivor insurance policies, standard industry practice assumes independence of mortality rates among the insured and adds on loading factors to compensate for possible under-estimations of the joint last survivor mortality due to common life style, broken heart factor or common disaster. Considering the fact that the separate mortality experiences for males and females ar...

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 human capital is often the largest asset an investor possesseswhenhe is young, protecting human capital from potential risks should be considered as a part of overall investment advice. The risk of the loss of the policyholder’s human capital – themortality risk – to the household can be partially hedged by a term life insurance policy. Guaranteed Minimum Death Benefits (GMDB) in Variab...

For annuity providers, longevity risk, i.e. the risk that future mortality trends differ from those anticipated, constitutes an important risk factor. In order to manage this risk, new financial products will be needed. One of the basic building blocks for such mortality backed securities is the so-called survivor or longevity bond, the future payments of which depend on the survival rates of a...