Defined terms for the annuity market and lifetime income landscape.
A longevity annuity is any deferred income annuity designed primarily as longevity insurance — typically with a deferral period of fifteen years or more and payments commencing at an advanced age — with the DIA and the advanced life deferred annuity (ALDA) as the two principal structural sub-types.
A longevity bond is a fixed-income security whose payments depend on the realized mortality of a defined reference population, designed to transfer systematic longevity risk between counterparties in capital markets.
Longevity heterogeneity is the variation across individuals in expected lifespan that goes beyond what age and sex alone explain, reflecting differences in socioeconomic position, health status, geography, lifestyle, and other underlying factors.
