Life Annuity Products and Their Guarantees

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This publication helps policy makers to better understand annuity products and the guarantees they provide in order to optimise the role that these products can play in financing retirement. Product design is a crucial factor in the potential role of annuity products within the pension system, along with the cost and demand for these products, and the resulting risks that are borne by the annuity providers. Increasingly complex products, however, pose additional challenges concerning consumer protection. Consumers need to be aware of their options and have access to unbiased and comprehensible advice and information about these products.



Executive Summary

As a result of the shifting retirement landscape, individuals are bearing increasing responsibility to manage the financing of their own retirement, not only in the saving and investment decisions they make during the accumulation of assets but also how they will draw down their assets in retirement. Along with this increased responsibility comes increased risk, both in terms of the investment risk of lower investment returns than expected, but especially the longevity risk of outliving assets in retirement.


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