Pension
Pensions are a form of life insurance. However, whilst basic life assurance, permanent health insurance and non-pensions annuity business all include an amount of mortality or morbidity risk for the insurer, pensions account for longevity risk.
A pension fund will be built over the working life of a person. When the person retires, the pension will become in payment, and at some stage the pensioner will buy an annuity contract, which will guarantee a certain payment each month until death.
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