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Lifetime Annuity – Insurance or Risky Investment?

Radosław Kurach et al.

Review of Behavioral Economics2025https://doi.org/10.1561/105.00000201article
AJG 2ABDC B
Weight
0.50

What the paper says

The roots of the annuity puzzle, recognized as an unexpectedly low demand for lifetime annuities compared to theoretical predictions, are the subject of an ongoing research debate. In this study, we present empirical evidence that may cast new light on this issue. Utilizing data from a nationwide survey combined with a nonincentivized experiment on pension attitudes, we investigate the dual nature of individuals’ risk perception associated with lifetime annuity products. A wide range of control variables is employed to ensure the robustness of the results. We find a significant relationship between the demand for lifetime annuities and one’s relative risk attitude in two areas. Consequently, lifetime annuity buyers are likely to be risk-averse but, at the same time, risk-tolerant when it comes to financial matters. We argue that individuals view lifetime annuities not just as a hedge against longevity risk but also as an investment vehicle with uncertain future payouts.

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https://doi.org/https://doi.org/10.1561/105.00000201

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@article{radosław2025,
  title        = {{Lifetime Annuity – Insurance or Risky Investment?}},
  author       = {Radosław Kurach et al.},
  journal      = {Review of Behavioral Economics},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1561/105.00000201},
}

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.