Abstract
Due to the low mortality rates and decreased fertility, as well as the subsequent increased aging problems, insufficient pensions have become a worldwide serious issue. In addition to traditional resources, such as public and private pensions, commercial annuities, individual savings and investments, reverse mortgages provide a new resource option for retirement. We investigate the application of reverse mortgages to retirement and analyze the risk for both governments and financial institutions of issuing reverse mortgage products. Numerical results show that gender, age, loan rate, the return of house price, and the maximum loan amount have significant impact on the risk of issuing reverse mortgages. These factors are very sensitive to the loss distributions of reverse mortgages, therefore risk management is a crucial means for governments and financial institutions to control the risk of reverse mortgages to avoid huge losses.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
