mortality credits

What Are Mortality Credits?

Mortality credits are a financial benefit that arises in pooled-risk annuity products (like lifetime income annuities) when:

1. You’re part of a group of annuity holders.
2. Some members of the group die earlier than expected.
3. Their unused funds remain in the pool.
4. The remaining funds help support higher lifetime income payments to the survivors.

In short:

People who live longer benefit financially from those who don’t.

🔹 Where Mortality Credits Exist

Immediate Annuities (SPIAs)

✅ Yes

Payments are pooled, and the insurance company uses mortality assumptions.

Deferred Income Annuities (DIAs)

✅ Yes

Similar to SPIAs, mortality pooling   affects future income.

Fixed Indexed Annuities (FIAs) with GLIR

✅ Yes (indirectly)

Mortality credits are priced into the income rider’s payout rates.

Variable Annuities with GLB Riders

✅ Yes (indirectly)

Lifetime income uses actuarial   assumptions based on mortality.

Accumulation-focused annuities with no lifetime income

❌ No

No pooling of risk; just tax-deferred growth.

🔹 Why Do Mortality Credits Matter?

They allow insurers to:

• Offer higher payouts than a conservative drawdown strategy.
• Provide income for life, regardless of how long you live or how the markets perform.

Without mortality credits, an insurer would have to use more conservative assumptions, meaning lower income payouts.

🔹 So, Are Mortality Credits Real?

✅ Yes—absolutely real.
They’re a core part of what makes annuities able to guarantee income for life. You don’t see them as a line item, but they’re built into the actuarial pricing and payout structure.