Substandard Annuities Report

Research Projects – Life Insurance


By: LIMRA International (Mathew Drinkwater, Joseph Montminy, Eric Sondergeld)
Ernst & Young(Christopher Raham, Chad Runchey)

Within the income annuity marketplace, there is a growing interest in offering annuities on an underwritten basis. Known as substandard or "age-rated" annuities, they are designed to offer a greater payout to those individuals who present a lesser longevity risk. Jointly sponsored by LIMRA International and the Society of Actuaries' Product Development Section and the Committee on Life Insurance Research in collaboration with Ernst & Young, this report describes substandard annuity products and discusses the market opportunity for them, the associated risk management issues, and the issues companies address when competing in this market.

If you have questions or comments on this report, please contact Ronora Stryker, SOA Research Actuary.

The SOA would like to thank the following members of the Project Oversight Group for their valuable contribution to this project:

  • Noel Abkemeier, Chair
  • John Have
  • Harold Ingraham Jr.
  • Robert Hupf
  • Robert Ozenbaugh
  • Michel Perreault
  • Ronald Ziegler
  • Jan Schuh, SOA staff
  • Ronora Stryker, SOA staff