Arbeitspapier

Flexible life annuities

Annuity contracts typically deliver a stream of income at a predetermined level in order to insure against the risk of longevity. This paper explores whether flexible annuities, which give subscribers the possibility to choose between different levels for their annuities, may be welfare enhancing. In the case where agents gradually discover their actual probability of survival, a predetermined and one-size-fits-all annuity plan is optimal. If an expenditure risk is added along with the longevity risk, a flexible annuity plan is better even though the consumption path cannot be isolated from uninsured expenses anymore.

Language
Englisch

Bibliographic citation
Series: CESifo Working Paper ; No. 2125

Classification
Wirtschaft
Macroeconomics: Consumption; Saving; Wealth
Asymmetric and Private Information; Mechanism Design
Subject
Alterssicherung
Sterblichkeit
Risikopräferenz
Agent-based Model
Vertragstheorie

Event
Geistige Schöpfung
(who)
Direr, Alexis
Event
Veröffentlichung
(who)
Center for Economic Studies and ifo Institute (CESifo)
(where)
Munich
(when)
2007

Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Direr, Alexis
  • Center for Economic Studies and ifo Institute (CESifo)

Time of origin

  • 2007

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