Longevity Risk in Living Benefits

Uncertainty in mortality and disability trends, from which the longevity risk in living benefits arises, is discussed. The financial impact of longevity risk on life annuities, sickness benefits for the elderly and long-term care covers is then analysed, focussing in particular solvency requirements and reinsurance arrangements. Finally, special attention is devoted to mortality guarantees and flexibility in the structure of life annuities, looking at annuities in the context of overall post-retirement income planning.