In Chapter 5 Practice Questions,
"Describe the risks that arise from the introduction of legislation that prevents insurers from pricing immediate annuity business by gender. "
One of the points stated that averaged annuity rate will appear relatively more attractive to males than to females.
However, it is previously stated that annuity rates priced on a gender-specific basis would be lower for women. So, after averaging out, shouldn't women be more attracted to the annuity and less attractive to men since their annuity rate is worsened than before?
Please help as this really confuse me.
Thanks.
"Describe the risks that arise from the introduction of legislation that prevents insurers from pricing immediate annuity business by gender. "
One of the points stated that averaged annuity rate will appear relatively more attractive to males than to females.
However, it is previously stated that annuity rates priced on a gender-specific basis would be lower for women. So, after averaging out, shouldn't women be more attracted to the annuity and less attractive to men since their annuity rate is worsened than before?
Please help as this really confuse me.
Thanks.