Seventh International Longevity Risk and Capital Markets Solutions Conference was held in Frankfurt from eighth to ninth September 2011
. To be able to lower the danger of pension funding turning out to be insufficient, advisors in the field of pension and insurance have gathered from across the world during this conference to discuss the issue of extending life risk.. Longevity liability results from the risk brought on by the longer life expectancy that puts unwanted weight on pension finances and retirement packages as a result of longer payment periods than it is actually projected. This issue can not wait no more because presently it's predicted that mainly in UK over 10 million people will live to see their 100 birthday.
Dr David Blake, Professor of Pension Economics and Director of the Pensions Institute at Cass Business School, and chair of the conference, said: "Longevity risk is an increasingly important risk to recognize, quantify and manage for both pension plan and annuity providers, as well as for governments and individuals. Getting the right trend improvements in life expectancy is the key both to managing this risk and to creating an asset class acceptable to investors to buy into.But, not only governments and insurance companies are worried by the longevity risk. A large number of pensioners are worried that they might outlive their pension funds. We have asked for advice from the UK pensions advisory service who recommended an insurance called longevity insurance. This type of insurance is bought later in retirement life and usually paid out between the age of 80 and 85. This insurance guarantee income later in life for those who are worried that they will run out of pension funds in their old age. This product is less expensive than the usually pension funding and this is its advantage. Also it offers a better return on investment. Unfortunately, there is also the risk of losing the money if you do not live to receive the payout's. It can not be transferred to your kids. This is one more reason to believe that longevity management is essential for any economy today to make sure that their state pension rates maintain the volume necessary for a decent life of all pensioners.