Impaired Life Annuities

Abstract

In recent years interest in the underwriting of annuity products has been growing steadily. It is a very different proposition compared to the underwriting of life assurance products. Whereas life assurance provides cover against the risk of dying too soon, annuities cover against the risk of not dying soon enough. Many of the normal rules of underwriting are therefore reversed. A cautious decision is one where the policyholder is assumed to be healthy. It should be assumed that missing information indicates good health, rather than poor, and that applicants may be tempted to exaggerate, rather than conceal, unhealthy behaviour, such as drinking and smoking.