Defined terms for the annuity market and lifetime income landscape.
A bailout provision is a contractual feature of certain deferred annuities — most commonly fixed indexed and fixed annuities — that allows the contract owner to surrender without a surrender charge or market value adjustment if a defined crediting parameter falls below a specified threshold.
Basis risk in the pooling context is the gap between the longevity risk a pool's structure is designed to absorb and the longevity risk the pool actually faces, arising when the pool's members or their mortality experience differ in unanticipated ways from the pool's design assumptions.
