Originally Posted by Big_Hitter
ripped off means that the price of the policy is based on something much lower than prevailing interest rates and/or outdated mortality
In the deferred annuity world, a company using outdated mortality or interest rates is probably charging the lowest prices. That would be good for me.
I don't do a calculation to determine if I'm getting "ripped off" when I buy auto insurance, or homeowners insurance, or term life insurance.
I can comparison shop to get a good market price. Then I can see if the result fits my financial needs.
Yes, I understand that in the early years of a traditional SPIA I'm basically trading dollars with the insurance company for high probability events. In that case, an IRR calculation can be a good filter.
But, this thread is about "longevity insurance", so my comments are tilted toward that product. Note that I tried to separate them back in post #7.