Texas Tech University

Is Longevity Insurance Too Risky?

The Wall Street Journal

October 25, 2016

The Wall Street Journal - The chance of a guaranteed lifetime income in old age seems like something risk-averse people would jump at.

"The theory would suggest that people who are more risk-averse should be more likely to purchase longevity insurance, as it provides protection against a decline in future spending," says the study by Michael Guillemette of the University of Missouri, Terrance Martin of the University of Texas Rio Grande Valley, Benjamin Cummings of St. Joseph's University in Philadelphia and Russell James of Texas Tech University. But those same people "may perceive longevity insurance as risky, since it involves an upfront cost for an uncertain future payout," the study found.

Read the story here.