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The Influence of Demographic and Economic Factors on the Widow’s Reverse Annuity Benefits in Coronavirus Pandemic

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  • Marciniuk Agnieszka

    (Assistant Professor, Wroclaw University of Economics and Business Faculty of Economics and Finance, Wrocław, Poland.)

  • Zmyślona Beata

    (Assistant Professor, Wroclaw University of Economics and Business Faculty of Economics and Finance, Wrocław, Poland.)

Abstract

The COVID-19 pandemic has affected many areas of society and the economy. In the epidemiological field, it has significantly increased mortality, especially in the elderly population. It has greatly affected the real estate and financial market. The price of housing, inflation, and interest rates rose. Therefore, housing is currently unaffordable. The analysis of the Life Expectancy Tables jumped to a higher risk of death for men than for women. The pandemic has made women more likely to be widowed than men, and more often, while their economic and social status has worsened. Higher mortality rates have an impact on the cash flow associated with insurance and reverse annuity contracts. Reverse annuity benefits also depend on the value of property and the interest rate. This article analyses the impact of higher mortality rates, property values, and interest rates on annuity benefits for widows. The actuarial value of the life annuity is used on the calculation of benefits. The interest rate is modelled using the Svensson model of spot interest and the 3m WIBOR. Financial mathematics for life insurance and demographic methods are used.

Suggested Citation

  • Marciniuk Agnieszka & Zmyślona Beata, 2024. "The Influence of Demographic and Economic Factors on the Widow’s Reverse Annuity Benefits in Coronavirus Pandemic," Wroclaw Review of Law, Administration & Economics, Sciendo, vol. 14(2), pages 17-36.
    • Handle: RePEc:vrs:wrolae:v:14:y:2024:i:1:p:23-38:n:1009
    DOI: 10.2478/wrlae-2024-0005
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    References listed on IDEAS

    as
    1. Agnieszka Marciniuk & Emília Zimková & Vlastimil Farkašovský & Colin W. Lawson, 2020. "Valuation of Equity Release Contracts in Czech Republic, Republic of Poland and Slovak Republic," Prague Economic Papers, Prague University of Economics and Business, vol. 2020(5), pages 505-521.
    2. Abel Brodeur & David Gray & Anik Islam & Suraiya Bhuiyan, 2021. "A literature review of the economics of COVID‐19," Journal of Economic Surveys, Wiley Blackwell, vol. 35(4), pages 1007-1044, September.
    3. Joanna Dębicka & Stanisław Heilpern & Agnieszka Marciniuk, 2020. "Application of Copulas to Modelling of Marriage Reverse Annuity Contract," Prague Economic Papers, Prague University of Economics and Business, vol. 2020(4), pages 445-468.
    4. Agnieszka Marciniuk, 2021. "Equity Release Contracts with Varying Payments," Prague Economic Papers, Prague University of Economics and Business, vol. 2021(5), pages 552-574.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    reverse annuity contract; Covid mortality rate; interest rate; widow; elderly population; benefits; inequalities in health and social care;
    All these keywords.

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • J1 - Labor and Demographic Economics - - Demographic Economics

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