Chapter 3: Flashcards
1
Q
Immediate Annuity - NEEDS OF CUSTOMERS
A
- Convert capital to lifetime income
- remove Uncertainty of how quickly to spend capital to provide income for remaining life
- protect = future income & standard of living from longevity risk
2
Q
Immediate Annuity - RISKS TO INSURER
A
- Longevity risk
- Anti-selection risk
- Investment risk
- Expense risk
- Withdrawal risk
2
Q
Immediate Annuity - Exp reserve can be insufficient because of
A
- inflation
- operations are less efficient than anticipated
3
Q
Deferred Annuity - NEEDS OF CONSUMERS
A
4
Q
A
