Could "tontines" expand the market for longevity insurance?

Wettstein, Gal. “Could "tontines" expand the market for longevity insurance?”. Issue in Brief 18-7, Chestnut Hill, Mass.: Center for Retirement Research at Boston College, April 2018. http://hdl.handle.net/2345/bc-ir:107912.
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Abstract

The brief's key findings are: (1) Annuities offer one way for retirees to turn savings into lifelong income, but these products are expensive. (2) A less expensive alternative advocated by some finance experts is a "tontine," a product that does not currently exist in the marketplace. (3) A tontine would offer investors regular payments that start out smaller than an annuity payment, but grow over time for those who survive to older ages. (4) However — unlike annuities — tontines do not insure against the risk that investors live longer than expected on average, which would reduce the size of the payments. (5) If tontines did exist, they would likely make the most sense as part of a larger portfolio that also includes some liquid wealth and annuities.

Title
Could "tontines" expand the market for longevity insurance?
Author
Wettstein, Gal
Center
Center for Retirement Research
Genre
report
Date Issued
April 2018
Publisher
Center for Retirement Research at Boston College
Series Title
Issue in Brief
Series Number
18-7
Persistent Link
http://hdl.handle.net/2345/bc-ir:107912
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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