VALUATIONS OF BENEFITS PAID FROM EQUITY RELEASE PRODUCTS IN THE CONTEXT OF THE CHANGING FINANCIAL REQUIREMENTS OF ELDERLY PERSONS
VALUATIONS OF BENEFITS PAID FROM EQUITY RELEASE PRODUCTS IN THE CONTEXT OF THE CHANGING FINANCIAL REQUIREMENTS OF ELDERLY PERSONS

Summary/Abstract: This paper presents a comparison of valuations of benefits paid under the framework of equity release products. Such benefits are adjusted to the changing structure of financial needs and requirements brought about by ageing processes and health deterioration among the elderly. The first of the two adopted variants takes into consideration the number of years for which elderly persons may reasonably expect to retain good health. The second variant is grounded on the assumption that the demand for financial support will increase at each consecutive stage of the ageing process. Valuations of benefits paid for each scenario were calculated using life annuities. The findings suggest that the values of benefits paid in each of the scenarios are higher for males. However, compared to old-age pension benefit values, both seem to offer a more profitable solution for females.

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