Biometric risk transfers in life annuities and pension products: a survey

We address life annuities and pensions, looking in particular at transfers/sharing of biometric risks, i.e. risks related to the annuitant’s lifetime and health status, involved by the policy conditions or the pension plan rules. First, we focus on various arrangements which aim at building the post-retirement income, and involve either the accumulation phase, or the payout phase, or both. Various products are available on financial and insurance markets, each product with a specific guarantee structure (Conventional Life Annuities either immediate or deferred, Variable annuities, withdrawal plans, etc.). We then shift to a range of specific annuity products, stressing the relevant features: Advanced Life Delayed Annuity (ALDA), Ruin Contingent Life Annuity (RCLA), Variable Annuities (VA). Finally, we focus on some arrangements for the payout phase: the life annuity with a guarantee period, the value-protected life annuity (that is, providing “capital protection”), progressive annuitization schemes, life annuities combined with Long Term Care (LTC) benefits. We conclude with a short introduction to the longevity-linked life annuities.