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

Additional URL

https://doi.org/10.1515/apjri-2013-0027

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