Mortality

Longevity risk has existed as an asset class for quite some time but has primarily been the focus of larger institutions. In a recent Financial Times article, the author discusses the recent proliferation of longevity and mortality related investment products. The range of product options include: Life settlements, blocks of annuities, reverse mortgages and life tenancies. Longevity/Mortality swaps. Structured notes, including pass-through, principal protected notes, coupon protected notes and...

There is a good article on the use of immediate annuities by Walter Updegrave who is a senior editor at Money Magazine. The article discusses how to think about an immediate annuity in light of other guaranteed payments from Social Security or a pension plan . Laddering of annuity purchases is discussed. Age and timing of an annuity purchase is addressed, as is the concept of the mortality yield or mortality credit . Source: Money Magazine Full Story

MetLife recently announced the launch of a simple, low cost variable annuity called Simple Solutions. The Simple Solutions variable annuity will be sold through banks and is intended to address retirees and near-retirees in the range of 60-80 years of age. Features and highlights include: A guaranteed lifetime withdrawal benefit of up to 6% of the initial investment if withdrawals begin after age 76, 5% between 65 and 75, and 4% if before age 65. Automatic annual increases of the GLWB if the...

A basic checklist from a top financial planner is worth a look if you are trying to understand the potential fees and expenses associated with annuities: The author considers the following: Annual contract charges Mortality and expenses charge (M&E Fee) Asset management fees Surrender charge Source: CNBC Full Story