Publication Type
Journal Article
Version
submittedVersion
Publication Date
3-2014
Abstract
This article contributes to a better understanding of the risks involved in a life annuity investment. We examine the distribution of weighted annuity benefits and assess various measures of dispersion such as the coefficient of variance. In particular, we quantify the standard deviation about the expected value, thereby extending the usefulness of the popular money’s worth framework for annuity valuation. The effort toward a more detailed and more accurate risk picture of investing in annuities enables retirees to differentiate among products that may appear seemingly uniform in terms of money’s worth, but vary widely in terms of their risk attributes.
Keywords
annuities, money’s worth ratio, risk measures
Discipline
Asian Studies | Economics | Finance
Research Areas
Econometrics
Publication
Asia-Pacific Journal of Risk and Insurance
Volume
8
Issue
1
First Page
1
Last Page
26
ISSN
2153-3792
Identifier
10.1515/apjri-2013-0027
Publisher
De Gruyter
Citation
FONG, Joelle H. Y.; LEMAIRE, Jean; and TSE, Yiu Kuen.
Improving money's worth ratio calculations: The case of Singapore's pension annuities. (2014). Asia-Pacific Journal of Risk and Insurance. 8, (1), 1-26.
Available at: https://ink.library.smu.edu.sg/soe_research/1613
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1515/apjri-2013-0027