We construct a tractable discrete-time overlapping generations model of a closed economy and use it to study government redistribution of accidental bequests and private annuities in general equilibrium. Individuals face longevity risk as there is a positive probability of passing away before...

An annuity is an arrangement in which an individual makes a one-time payment (the premium) to an insurer in exchange for a lifetime payment stream. Ideally, the expected present value of the payment stream matches the premium, making it a fair annuity. In practice, the payment stream is smaller...