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Analyzing the Selection Effect in the Private Korean Annuity Market
- Title
- Analyzing the Selection Effect in the Private Korean Annuity Market
- Authors
- Yun J.; Zi H.
- Ewha Authors
- 지홍민
- SCOPUS Author ID
- 지홍민
- Issue Date
- 2022
- Journal Title
- Sustainability (Switzerland)
- ISSN
- 2071-1050
- Citation
- Sustainability (Switzerland) vol. 14, no. 9
- Keywords
- adverse selection; money’s worth; private annuity
- Publisher
- MDPI
- Indexed
- SCIE; SSCI; SCOPUS
- Document Type
- Article
- Abstract
- The purpose of this study is to investigate the degree of adverse selection in the Korean individual annuity market using the money’s worth calculations. The insurers’ pricing of different annuity products reflects individual’s self-selection into products based on private information about their mortality prospects. Using payments offered for different products, money’s worth calculations were higher for younger and male annuitants, annuity with a bigger premium size and longer guarantee period, frontloaded (as opposed to level) annuity, joint (as opposed to single) annuity, tax-qualified (as opposed to non-tax-qualified) annuity, and deferred (as opposed to immediate) annuity. In a cross-country analysis, we observe that the cost of adverse selection is higher in countries with more generous social security income. © 2022 by the authors. Licensee MDPI, Basel, Switzerland.
- DOI
- 10.3390/su14095276
- Appears in Collections:
- 경영대학 > 경영학전공 > Journal papers
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