Is adverse selection in the annuity market a big problem?

Webb, Anthony. “Is adverse selection in the annuity market a big problem?”. Issue in Brief 40, Chestnut Hill, Mass.: Center for Retirement Research at Boston College, January 2006. http://hdl.handle.net/2345/bc-ir:104438.
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Abstract

An annuity provides an individual or a household with insurance against living too long. In exchange for a one-time premium payment, the insurer agrees to make periodic payments to the insured for life. In theory, annuities seem like a valuable product for many retirees given an uncertain date of death. However, in practice, few people purchase annuities. Researchers who have studied this puzzle have concluded that annuities are not "actuarially fair," that is, for someone with average life expectancy they provide only about 74 to 85 cents in income for every dollar in premium payments...

Title
Is adverse selection in the annuity market a big problem?
Author
Webb, Anthony
Center
Center for Retirement Research
Genre
report
Date Issued
January 2006
Publisher
Center for Retirement Research at Boston College
Series Title
Issue in Brief
Series Number
40
Version Identification
Version of record.
Persistent Link
http://hdl.handle.net/2345/bc-ir:104438
Use Restrictions
These materials are made available for use in research, teaching and private study, pursuant to U.S. Copyright Law. The user must assume full responsibility for any use of the materials, including but not limited to, infringement of copyright and publication rights of reproduced materials. Any materials used for academic research or otherwise should be fully credited with the source. The publisher or original authors may retain copyright to the materials.
Subject
Financing retirement

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