Life annuities and assurances
General · Mathematics
Study notes
Q: What is the difference between a life annuity and a life assurance? Give symbols. Life annuity ä_x: pays WHILE ALIVE (income stream!). Life assurance A_x: pays ON DEATH (lump sum!). Annuity: longevity risk; assurance: mortality risk! Term assurance A^1_{x:n}: death within n years. Endowment: pays on death OR survival! (Annuity: live long; assurance: die!)