CANNEX Financial Exchanges and The Individual Finance and Insurance Decisions (IFID) Centre have launched a new index to track the performance of life annuities.

Life annuities are bond-like instruments that combine the financial stability of a fixed-income bond with the insurance that the holder will receive monthly coupons for as long as they live.

Until now, consumers lacked a uniform way of assessing the true investment return from their life annuity, given that a portion of their monthly income was interest income, a portion was return of principal, and a portion came from the pooling of longevity risk.

To increase the appreciation of life annuities’ investment properties, the annuity index from CANNEX and IFID will measure the implied life credits from purchasing a life annuity at the hypothetical age of 65, for both males and females.

The index can be used to measure the relative competitiveness of annuity quotes, as well as help consumers decide the best age to purchase a life annuity.

The index will be tracked weekly in a variety of financial publications.

More details about the index and financial methodology are available in a report at www.ifid.ca entitled: “Implied Life Credits: Developing an Index for Life Annuities”.

IFID is a non- profit research centre headed by Schulich School of Business Professor Moshe Milevsky. The IFID Centre conducts and disseminates applied research in the field of financial risk management for individuals.