@article {Milevsky99, author = {Moshe A. Milevsky}, title = {Mortality Plateaus and the Pricing of Longevity Insurance}, volume = {2}, number = {2}, pages = {99--107}, year = {2014}, doi = {10.3905/jor.2014.2.2.099}, publisher = {Institutional Investor Journals Umbrella}, abstract = {The article examines the implications for the pricing of longevity insurance and life annuities of a plateauing in the instantaneous force of mortality (IFM) at advanced ages. Given the increasing popularity of advanced life delayed annuities (ALDAs, or deferred-income annuities) and the current low-interest-rate environment, the present-value cost of misestimating the dynamics of late-life mortality can be substantial. The article also offers some comments about the possibility of using ALDA prices to imply market expectations of mortality dynamics and plateaus in a manner similar to implied volatility in the options market. All this has obvious implications for annuity buyouts, buy-ins, and other forms of longevity risk transfer as well the most pressing retirement problem for individuals{\textemdash}how to make their money last for the remainder of their lives.TOPICS: Retirement, fixed income and structured finance, wealth management}, issn = {2326-6899}, URL = {https://jor.pm-research.com/content/2/2/99}, eprint = {https://jor.pm-research.com/content/2/2/99.full.pdf}, journal = {The Journal of Retirement} }