If one considers the imbalance to consumers as a result of cross subsidies between risk pools, one can clearly see the need for a more advanced approach when it comes to determining the price of Guaranteed Annuities.
Paramount Life’s focus has been to develop a world leading algorithm (patent pending) that assesses the unique characteristics of each Guaranteed Annuity policyholder. This approach will ensure that policyholders will for the first time receive the correct return on their Guaranteed Annuity investment.
Guaranteed Annuities provide protection against the risk of investment performance and the risk of longevity
This can best be illustrated by looking at the Income Frontier™ (see diagram). The Income Frontier™ illustrates the enhanced income you can receive in retirement by purchasing a Guaranteed Annuity, and considering your Lifestyle and Medical frontier.
The current market only looks at a retiree's age and gender resulting in a Standard Frontier.
Life expectancy is improving by in excess of 5% each year. The Paramount Guaranteed Annuity maximises the protection of your income against the chance of you living longer than expected.