Sentences with phrase «of mortality credits»

Because of the mortality credits accrued during the deferral period, the time period between the purchase of a longevity annuity and when the longevity annuity payout begins, longevity annuities can be more efficient over the long run than immediate annunities, all else being equal.

Unfortunately the Defined Contribution (DC) plans that are displacing DB plans «rob» retirees of both mortality credits and the benefits of risk pooling, Milevsky wrote.

For most people, at some age (generally > 50), the expected insurance value of the mortality credits (your longevity insurance) becomes greater than the cost for some piece of their portfolio.

Not exact matches

Because in addition to interest and return of a portion of your principal, each annuity payment effectively contains an extra little amount known as a «mortality credit» — essentially, money transferred from annuity owners who die early to those who live long lives.

So an annuity payment includes not just investment gains and the return of your original investment, but this additional «mortality credit» income as well.

Mortality credits aren't available to you when you invest as an individual, which means the only way for you to get the same level of income an annuity offers is to invest more aggressively.

So in practical terms how do mortality credits as well as an annuity's guarantee of a steady lifetime payment translate into an edge over simply investing your money and carefully drawing it down?

Which means that the annuity payment you receive includes not just investment gains and the return of your original investment, but mortality credits as well.

The upshot, though, is that unless you're willing to take on more investing risk — which also means accepting the possibility of running through your money while you're still alive — it's very unlikely that you can match an immediate annuity's guarantee of lifetime payments, which includes that extra bit of income that mortality credits provide.

But if you've rejected an immediate annuity because you think you can generate the same level of guaranteed lifetime income investing on your own, I have two little words for you: mortality credits.

I can't tell you the number of times after doing an annuity story that I've gotten feedback from people who essentially say they would never buy annuity because they think can do better investing on their own (never mind that's difficult to impossible to do without taking on greater risk because annuities have what amounts to an extra return called a «mortality credit» that individuals can't duplicate on their own).

What gives the annuity its edge is that each annuity payment you receive contains not just interest and return of a portion of your principal but an extra «return» known as a mortality credit.

Nice compendium, though some discussion of the concept of «mortality credits» would be useful.

I'll be the first to admit that «mortality credits» and the cost / benefit analysis of them is well beyond my scope of expertise on this topic!

So the company may raise the expense charges and mortality costs and lower the amount of interest credited to the accumulating funds.

Last August Milevsky's article Tontine Thinking was published in The Actuary, arguing mortality credits should be re-introduced explicitly in the design of future Retirement Income products.

Since these products do not offer any retirement alpha (i.e. longevity credits, otherwise known as mortality credits) a topic that I highlighted via this blog a few months ago: Increased Life Expectancy Leads to a Decrease in Payout Rates, it will take a much larger portion of your funds to generate the same amount of income.

Milevsky argues that even at today's rock - bottom interest rates, annuities should pay more than comparable fixed - income investments because of the built - in mortality credits.

Moreover, the inflation - adjusted income flows, at least initially and for several years thereafter, will likely be lower than those of a life annuity because of the latter's «mortality credit,» the sharing of mortality gains among survivors in the annuity purchase pool.

A longer deferral period will allow a client to buy a larger annuity payment because (1) assets have more time to grow; (2) there will be fewer years of distribution; and (3) more mortality credits are available.

While I disagree with some of Sallinger's claims (e.g., that all mortality sources, including cats, add to declining bird populations), I have to give him (and Feral Cat Coalition of Oregon executive director Karen Krauss) credit for taking some rather extraordinary steps in, to use Lynn's words, merging horizons of understanding.

Moreover, the paper gets its history wrong when it notes that «Total cancer mortality rates did not decline until 1990, 25 years after the identification of the effect of smoking on lung and other cancers...» Well, actually, it was more like 50 years, because the earliest studies to connect smoking and lung cancer were conducted not by NIH - funded scientists but by Nazi scientists in the run - up to World War II.4 By the logic of the PNAS paper, then, ought we to be crediting the Nazi health science agenda with whatever progress has been made on reducing lung cancer, rather than the incredibly protracted and difficult public health campaign (that, for the most part, NIH had nothing to do with) aimed at getting people to cut down on smoking?

Your Value - Added Whole Life policy is guaranteed over the life of the policy to earn a minimum crediting rate (specified in your policy) less charges for mortality and expenses.

Because of something called mortality credits.

If you buy your income annuity at age 70 or older, the annuity companies can provide a higher payout to you; something akin to a higher rate of return because of the way these mortality credits work.

Avoiding Tax Trap in the Exchange The very common reason why many policyholders would opt to change their old annuity policy and old life insurance policy in exchange to a new annuity policy and new annuity policy is mainly because a new policy is most likely will perform much better compared to the old policies since nowadays there are already improvements when it comes to mortality which will provide a lower insurance cost, a lesser administration expense on the policy which will provide lower cost, improvements in the said underwriting with lower cost, improvements in the health of the insured which will trigger lower cost, improvements in interest crediting which will perhaps provide higher rates of interest as well as the interest linked in an index and to some cases, a worsened health which may cause higher than the usual annuity payments.

Companies make investments in real estate property that generate returns, they get returns on their own market - related investments, there are mortality credits (think «x» number of 50 year old men are supposed to die in 2015, but only 50 % of them do.

Deferral of Social Security income, say from age 62 to age 70, has a similar effect on payouts as in a deferred income annuity (another name for longevity insurance); mortality credits can accrue during this deferral period, say from 62 to 70.

The returns of a longevity insurance (ignoring fees) are from the principal, interests, and mortality credits.

Future changes in the environment can easily rearrange the efficiencies of these various elements; efficiencies based on mortality credits are most robust.

Despite the fact that one research paper recently found Americans are more afraid of outliving their money during retirement than death itself, and economics research has long since shown that leveraging mortality credits through annuitization is an «efficient» way to buy retirement income that can't be outlived, the adoption of guaranteed lifetime income vehicles like a single premium immediate annuity purchased at retirement remains extremely low.

So the company may raise the expense charges and mortality costs and lower the amount of interest credited to the accumulating funds.

If the difference between the current mortality rates and the maximum rates is small, the company has little room to use higher mortality charges as a means of reducing the effective rate credited to cash values.