Longevity Risk and Annuitisation Decisions in the Absence of Special-Rate Life Annuities

Longevity risk affecting older adults can be transferred to the insurance market by purchasing a lifetime annuity. Special-rate life annuities, which are priced, among other factors, on the basis of health and lifestyle factors, go beyond traditional considerations of age and sex by using modified m...

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Detalles Bibliográficos
Autores: Andrés Sánchez, Jorge de, González-Vila Puchades, Laura
Tipo de recurso: artículo
Estado:Versión publicada
Fecha de publicación:2025
País:España
Institución:Universidad de Barcelona
Repositorio:Dipòsit Digital de la UB
OAI Identifier:oai:diposit.ub.edu:2445/219070
Acceso en línea:https://hdl.handle.net/2445/219070
Access Level:acceso abierto
Palabra clave:Renda
Risc (Assegurances)
Matemàtica actuarial
Longevitat
Income
Risk (Insurance)
Actuarial mathematics
Longevity
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spelling Longevity Risk and Annuitisation Decisions in the Absence of Special-Rate Life AnnuitiesAndrés Sánchez, Jorge deGonzález-Vila Puchades, LauraRendaRisc (Assegurances)Matemàtica actuarialLongevitatIncomeRisk (Insurance)Actuarial mathematicsLongevityLongevity risk affecting older adults can be transferred to the insurance market by purchasing a lifetime annuity. Special-rate life annuities, which are priced, among other factors, on the basis of health and lifestyle factors, go beyond traditional considerations of age and sex by using modified mortality tables. However, they are not available in many countries. In regions where life annuities are priced solely via standard mortality tables, retirees with below-average life expectancy may face unfair pricing. This study aims to quantify this actuarial unfairness and proposes an alternative annuitisation strategy for these retirees. The strategy allows them to transfer longevity risk by acquiring a life annuity on the basis of their actual mortality probabilities, thereby mitigating actuarial inequities. Additionally, the paper examines how tax incentives can exacerbate actuarial unfairness and, specifically for Spanish tax regulations, compares different alternatives under two scenarios related to the sources used for purchasing life annuitiesMDPI2025info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionapplication/pdfhttps://hdl.handle.net/2445/219070Articles publicats en revistes (Matemàtica Econòmica, Financera i Actuarial)reponame:Dipòsit Digital de la UBinstname:Universidad de BarcelonaInglésReproducció del document publicat a: https://doi.org/10.3390/risks13020037Risks, 2025, vol. 13(2), núm. 37https://doi.org/10.3390/risks13020037cc-by (c) Andrés-Sánchez, J. de et al., 2025http://creativecommons.org/licenses/by/4.0/info:eu-repo/semantics/openAccessoai:diposit.ub.edu:2445/2190702026-05-27T06:46:51Z
dc.title.none.fl_str_mv Longevity Risk and Annuitisation Decisions in the Absence of Special-Rate Life Annuities
title Longevity Risk and Annuitisation Decisions in the Absence of Special-Rate Life Annuities
spellingShingle Longevity Risk and Annuitisation Decisions in the Absence of Special-Rate Life Annuities
Andrés Sánchez, Jorge de
Renda
Risc (Assegurances)
Matemàtica actuarial
Longevitat
Income
Risk (Insurance)
Actuarial mathematics
Longevity
title_short Longevity Risk and Annuitisation Decisions in the Absence of Special-Rate Life Annuities
title_full Longevity Risk and Annuitisation Decisions in the Absence of Special-Rate Life Annuities
title_fullStr Longevity Risk and Annuitisation Decisions in the Absence of Special-Rate Life Annuities
title_full_unstemmed Longevity Risk and Annuitisation Decisions in the Absence of Special-Rate Life Annuities
title_sort Longevity Risk and Annuitisation Decisions in the Absence of Special-Rate Life Annuities
dc.creator.none.fl_str_mv Andrés Sánchez, Jorge de
González-Vila Puchades, Laura
author Andrés Sánchez, Jorge de
author_facet Andrés Sánchez, Jorge de
González-Vila Puchades, Laura
author_role author
author2 González-Vila Puchades, Laura
author2_role author
dc.subject.none.fl_str_mv Renda
Risc (Assegurances)
Matemàtica actuarial
Longevitat
Income
Risk (Insurance)
Actuarial mathematics
Longevity
topic Renda
Risc (Assegurances)
Matemàtica actuarial
Longevitat
Income
Risk (Insurance)
Actuarial mathematics
Longevity
description Longevity risk affecting older adults can be transferred to the insurance market by purchasing a lifetime annuity. Special-rate life annuities, which are priced, among other factors, on the basis of health and lifestyle factors, go beyond traditional considerations of age and sex by using modified mortality tables. However, they are not available in many countries. In regions where life annuities are priced solely via standard mortality tables, retirees with below-average life expectancy may face unfair pricing. This study aims to quantify this actuarial unfairness and proposes an alternative annuitisation strategy for these retirees. The strategy allows them to transfer longevity risk by acquiring a life annuity on the basis of their actual mortality probabilities, thereby mitigating actuarial inequities. Additionally, the paper examines how tax incentives can exacerbate actuarial unfairness and, specifically for Spanish tax regulations, compares different alternatives under two scenarios related to the sources used for purchasing life annuities
publishDate 2025
dc.date.none.fl_str_mv 2025
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
format article
status_str publishedVersion
dc.identifier.none.fl_str_mv https://hdl.handle.net/2445/219070
url https://hdl.handle.net/2445/219070
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.relation.none.fl_str_mv Reproducció del document publicat a: https://doi.org/10.3390/risks13020037
Risks, 2025, vol. 13(2), núm. 37
https://doi.org/10.3390/risks13020037
dc.rights.none.fl_str_mv cc-by (c) Andrés-Sánchez, J. de et al., 2025
http://creativecommons.org/licenses/by/4.0/
info:eu-repo/semantics/openAccess
rights_invalid_str_mv cc-by (c) Andrés-Sánchez, J. de et al., 2025
http://creativecommons.org/licenses/by/4.0/
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv MDPI
publisher.none.fl_str_mv MDPI
dc.source.none.fl_str_mv Articles publicats en revistes (Matemàtica Econòmica, Financera i Actuarial)
reponame:Dipòsit Digital de la UB
instname:Universidad de Barcelona
instname_str Universidad de Barcelona
reponame_str Dipòsit Digital de la UB
collection Dipòsit Digital de la UB
repository.name.fl_str_mv
repository.mail.fl_str_mv
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score 15,81155

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