Research On Layered Design Of EET Annuity From The Perspective Of Demand

With an aging population, the government issued a series of documents to encourage the development of annuity. However, the result was not satisfactory with the shortage of supply. This paper chooses EET annuity which the government named as the research sample to solve the problem of annuity and promote the supply-side reform.Firstly, this paper analyzes the factors affecting EET annuity with life insurance demand theory, and then obtains three categories of factors:uncertainties, capacity to pay, recognition. The three categories contain thirteen factors. Secondly, this paper has factor analysis to reduce the dimension. Thirdly, this paper has layered design of EET annuity based on the three ordered common factors. Fourthly, in order to measure the designed EET annuity types, this paper estimates the actuarial costs and replacement rate with actuarial model.Through the research, this paper obtains three ordered common factors. The first factor reflects capacity to pay, recognition of EET annuity, uncertainties of life and income. The second factor reflects uncertainty of market. The third factor reflects profitability and sensitivity to tax of company. This paper has a three-layer design of EET annuity which contains five classes based on the three ordered common factors, and then obtains 56 EET annuity types. The high security type's yearly actuarial cost is 17242? and its replacement rate can increase to 19% for every 10000 face amount, which is in agreement with the pension demands increased by ages. And the policy holder can obtain tax breaks equaled to 3.8 times of the yearly actuarial cost. The low security type's yearly actuarial cost is 12554?, which is 27% lower than the former, and its replacement rate is 16%,which is 3 per cent lower than the former for every 10000 face amount. It's suitable for the low-income people. And the earlier the employer participates in the annuity plan the lower the cost of the plan. Finally, this research provides advice for the design of EET annuity from the angle of insurers, customers and the government. The advice contain market segments, system, education, prudence and common sense, trade union and laws to improve the development of annuity.