Commercial Annuity Theoretical Research And Development Status Of China's Commercial Annuity

According to the life Cycle theory of saving of Franco Modigliani, the consumption-saving model in one's life cycle can be divided into two periods: saving in the working period and anti-saving in the retiring period. The incomes in the working period equal the outcomes in the whole life cycle, and the consumption in the retiring period comes from the accumulation of savings in the working period. If the accumulation of savings cannot afford the consumption in the retiring period, the olds are involved in the financial failure.With the developing of economics, progress of sciences and techniques and the growing of the medical level, the human life becomes longer and many countries go into the old-age societies. Meanwhile, the economical and political circumstances have unexpected impacts on future price level. As the best settlement of the financial failure problems, annuities are adopted widely. The developed countries wanted to use the fiscal power to deal with the problems firstly, but it became harder to continue for the olds are more and more. The ERISA(1974) symbols the set up of three-level retirement income security systems, which stimulates the business annuities. From then, it becomes the main stream to set up the three-level systems around the world.China stepped into the old-age society in 2000 when it is still a developing country. Chinese fiscal power cannot afford the retirement income security, while the business annuity products are not effectively used.The I and II part of the article had a research on the basic theories of individual annuities and employee pension benefit plans. The first two parts analyzed the characters of accumulation period and payout period, then concluded that the accounting annuities would be the main insurance products in the future. Then introduced the two main pension plans in USA, and analyzed the differences between individual annuities and pension plans. The III part of the article is thecross point of the first two parts. In this part, the article proved the two key aspects: the investment profit ratio and tax-deferred policies, which decided the boom and go on of annuity products. The IV part put the theory into China, analyzed the present condition of business annuity products in China, found out the back reason in using of the two key aspects, located the position of business annuity in the developing process, and point out the special background aspects in our country. The last part of the article analyzed the demands for the annuity products, and gave out some suggestions to promote the business annuity products in our country.