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Article Summary: Most people need longevity insurance rather than an immediate annuity

Most people need longevity insurance rather than an immediate annuity
Most people need longevity insurance rather than an immediate annuity

Article Summary

Ezra, Don. "Most people need longevity insurance rather than an immediate annuity." Financial Analysts Journal 72, no. 2 (2016): 23-29.

Write a summary about this article, and here are some questions that your summary should address:
?Ezra suggests that for most middle-income income savers, a certain kind of annuity is preferable. What kind of annuity does he suggest, and how does this annuity differ from the alternative that he compares it to?
?In arguing that this kind of annuity offers the most cost-effective way of dealing with longevity risk, Ezra utilizes a framework for categorizing property/casualty insurance risks that we have discussed in class. Describe this framework. Describe how longevity risk fits the description of a risk that is well-suited for risk transfer in this framework.
?In choosing the kind of annuity that Ezra recommends, the buyer would be accepting a lower likelihood of payment in exchange for a lower product cost (i.e. premium). How does this work?
?Although Ezra argues strongly that this kind of annuity is preferable for most savers, he does allow that a minority of savers might prefer the alternative for a couple of reasons. What are these reasons?
You are free to address other points in your summary if you wish

Article Summary: Most people need longevity insurance rather than an immediate annuity

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