Defined terms for the annuity market and lifetime income landscape.
Planning horizon risk is the risk that an individual using solo drawdown selects a chosen planning age and outlives it, exhausting savings before death, and is the specific form longevity risk takes when income is bounded by a self-selected horizon rather than paid for life.
Pooling multiplier is the factor by which the income produced per dollar of premium increases when capital is contributed to a mortality pool rather than self-managed, holding planning horizon and assumed return constant.
Realized value is the share of the theoretical pooling benefit that a real lifetime income product actually delivers, expressed as a fraction of what a frictionless pool could produce for the same individual at the same planning age.
Solo drawdown is self-managed drawdown of savings to a chosen planning age, with no remaining value past the planning age, used as the baseline against which pooled and insured lifetime income arrangements are evaluated.
A tontine structure, in the Longevity Standard context, is a mortality pool in which survivors receive redistributed shares of the capital of deceased members, used in the Longevity Standard framework as the structural reference for all pooled lifetime income arrangements.
