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Life insurance profitability depends on reliable mortality risk projections and pricing. While the COVID-19 pandemic has caused disruptions around the world, this is a temporary mortality shock likely to dissipate. In this paper, we investigate the long-run impact of COVID-19 on life insurance...
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An annuity is an insurance contract where a person (the annuitant) pays a premium upfront to obtain a stream of future … payments until his or her death. To assess the value of an annuity, we calculate the ratio of the expected present value of … annuity income to the annuity premium − this is known as the Money's Worth (MW). The MW takes into account the expected …
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towards a fixed-term payout.Meanwhile, the set of available options and the default option-life annuity -were unchanged during …
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Advantageous (or propitious) selection occurs when an increase in the premium of an insurance contract induces high-cost agents to quit, thereby reducing the average cost among remaining buyers. Hemenway (1990) and many subsequent contributions motivate its advent by differences in risk-aversion...
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