Factors Determining Choice of Investor's in Annuity Selection.

The investment attributes of annuities / pension plans, viz., return and risk, have been a subject of interest among academics and practitioners alike. Investors should carefully consider these factors when choosing an annuity policy to ensure they receive the best return on their investment while managing their risk appropriately. Overall, the findings of the study suggest that individuals' perceptions of their life expectancy play an important role in their decision-making while choosing a pension plan. Our study aims to investigate the place occupied by pensions in the investor's portfolio and examine whether economic, financial, and social changes drive the process of selection of a pension product by the investor vis-à-vis other alternative assets such as risk-free bonds and stocks. One of the major findings of our study is that as the rate of return (ROR) on an immediate life annuity is very low and the risk is high, its demand at lower levels of mortality is declining, while the demand for risk-free bonds and stocks has risen substantially. The study suggests that annuity providers should link immediate annuities to the equity market so as to improve the rate of return and thereby, this will attract more investors. [ABSTRACT FROM AUTHOR]