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Title:Life care annuities: Trick or treat for insurance companies? PDF Logo
Authors:Zhou-Richter, Tian
Gründl, Helmut
Issue Date:2011
Series/Report no.:ICIR Working Paper Series 04/11
Abstract:A life care annuity is a bundled insurance product comprised of a life annuity and long-term care insurance. Some recent studies find the two risks-longevity risk and long-term care risk-to be opposing and thus life care annuities advantageous in regard to pooling the two risks. Based on empirical data, this study discoversin contrast to previous work-a positive correlation between the two risks and the presence of adverse selection in the life care annuity market. We also address the pricing risk and solvency risk insurance companies face when providing life care annuities.
Subjects:Long-term care insurance
Adverse Selection
Risk Management
Document Type:Working Paper
Appears in Collections:ICIR Working Paper Series, International Center for Insurance Regulation, Universität Frankfurt

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