Centro de Documentacion de Fundación MAPFRE - Annuitization behavior : tax incentives vs. product design

MAP20140046027

Annuitization behavior : tax incentives vs. product design / Alexander Kling, Andreas Richter, Jochen Ruß

Sumario: We analyze and compare the impact of tax incentives and of introducing enhanced annuities on annuitization behavior considering heterogeneity among the insured. We find that tax incentives for annuitization result in a significant increase of the portion of people who should annuitize and also an increase of the insurer's profit since less healthy individuals also annuitize, i.e. adverse selection is reduced. However, the problem that different insured receive a different value for money is even increased by tax incentives. If enhanced annuities are introduced, the percentage of insured who should annuitize further increases. Adverse selection is further reduced and the differences in value for money from annuitizing shrink

En: Astin bulletin. - Belgium : ASTIN and AFIR Sections of the International Actuarial Association = ISSN 0515-0361. - 01/09/2014 Volumen 44 Número 3 - septiembre 2014

I. Richter, Andreas . II. Ruß, Jochen . III. Título.