Abstract
This study analyzes a longevity insurance for defined-contribution (DC) systems, using the case of Chile to evaluate its potential implementation.In the current context of increasing longevity and low interest-rates it has become important to find the most efficient formulas for both funding pensions and covering longevity risk, not only for countries with mandatory DC systems, but for pension systems in general.The proposed longevity insurance, in addition to covering the risk to survive longer than expected, it is also able to increase the level of pensions paid to insured workers by allowing the use of savings to fund retirement ages with high probability of being alive, and using income from deferred annuities at ages when the surviving probability is low for most of the pensioners.
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