On annuities: an overview of the issues

Longevity is increasing in the whole world, and savings for retirement are growing quickly. There is a potential demand for certainty in the income streams for pensioners since old-fashioned pay-as-you-go systems became financially stressed. A financial product, the annuity contract, offers longevity insurance but its market is not well developed, even in the small set of countries where it exists. The instrument, its market and its problems are analyzed, and a discussion is made in order to ameliorate the understanding of an apparent paradox: why an interesting instrument is not more demanded and supplied.