Annuity Pricing 101: Not As Hard As One Might Think

Annuity Pricing 101: Not As Hard As One Might Think

How are income annuities priced? It is not as hard as one might think, as the basic recipe requires just three ingredients:

1.    Mortality rates (which vary by age and gender) impact how long payments will be made. Younger people will have longer projected payout periods, which means that payout rates must be lower.

2.    Interest rates impact the returns the annuity provider can earn on the…

View On WordPress