TITLE
"Actuarial Costs of Protecting Retirees' Surviving Spouses,"
Journal of Insurance Issues, Normal
Nielson and Arnold F. Shapiro. March 1994, Vol. XVII, No. 1, pp.
35-48.
ABSTRACT
The growing popularity of private alternatives to joint-and-survivor annuity payouts for
pension plans has important consequences for workers and for the pension plans covering
them. This article summarizes the differing mortality assumptions used to price life
insurance and pension annuities, simulates the impact of these differing assumptions on
net premiums, and illustrates the sensitivity of those prices to the assumed interest
rate. This article offers a link between actuarial theory and current sales practices that
helps academics, pension administrators, and insurance agents to better understand why
pension maximization proposals can be attractive in some situations.
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