Definition
The Claim Stack is the set of three backing types — asset-backed, transfer-backed, and ownership-based — that specify what stands behind a lifetime income claim, distinct from the four properties, which specify how the claim behaves.
Why it matters
The four properties characterize how a claim works — who bears the risk, what adjusts, what access is kept, how costs are charged — but they do not, on their own, name what the income ultimately rests on. The Claim Stack supplies that second axis. Two arrangements can share an identical four-property profile and still differ in what backs the promise, and that difference is what determines counterparty risk.
How it works
The Claim Stack divides lifetime income claims by the entity and assets that fund them. An asset-backed claim is funded from an insurer's general account, with the individual holding a contractual claim against assets the insurer owns. A transfer-backed claim is funded by an entity other than an insurance company — a government program backed by taxing authority, or an employer plan backed by plan assets and sponsor obligations. An ownership-based claim is funded from assets the individual directly owns, with no transfer to a third party. The three are mutually exclusive at the level of a single claim: every lifetime income arrangement rests on exactly one of them. The backing type is a first-class structural fact, not a sub-property of risk sharing — an arrangement can transfer risk to an insurer (asset-backed) or to a government (transfer-backed) and the risk-sharing value is "transferred" in both cases, while the backing type is what distinguishes them.
In practice
When you evaluate any lifetime income arrangement, the backing type answers a question the four properties leave open: if the promise is tested, what stands behind it? For an asset-backed claim, that is the insurer's general account and the regulatory and guaranty framework around it. For a transfer-backed claim, it is the taxing authority or plan sponsor and the legal framework that governs it. For an ownership-based claim, it is your own assets, with no counterparty to fail but no risk transfer either. The question to put to a professional is which of the three backing types an arrangement rests on, and what the failure mode of that specific backing looks like — because counterparty risk has a different shape for each.
In the Longevity Standard Framework
The Claim Stack is the backing-type axis of the Longevity Standard framework, complementary to the four properties rather than part of them: the four properties characterize how a claim behaves, and the Claim Stack characterizes what backs it. Because the backing type is independent of the four-property profile, it is named separately in the framework's structural vocabulary — an arrangement's full structural characterization is its four-property claim profile plus its Claim Stack backing type. The cost-of-income framework and realized value operate the same way across all three backing types; the backing type does not change how the claim is measured, only what the income ultimately rests on.
Related terms
- Asset-backed claim
- Transfer-backed claim
- Ownership-based claim
- Risk sharing
- Counterparty risk
- Claim
- Claim framework
- General account