Framing the Annuity as Bequest Protection

An Experimental Test

Authors

  • Ying Yan Department of Personal Financial Planning, Eastern New Mexico State University
  • Russell N. James III Department of Personal Financial Planning, Texas Tech University

DOI:

https://doi.org/10.61190/fsr.v29i4.3463

Keywords:

Framing effects, Bequest motive, Estate planning, Annuities

Abstract

Bequest motives are commonly cited as a barrier for annuitization. This paper tests how framing partial annuitization as a protection for an intended bequest against the risk of asset exhaustion due to unexpected longevity influences the desire to purchase an annuity among a sample of 2,160 partic- ipants. The results indicate that this framing argument does increase interest in purchasing an annu- ity. Regression results demonstrate that this framing has a larger positive effect for individuals with a greater bequest motive. The relationship between annuitization framing and bequest motive dem- onstrated by this experiment has important practical and theoretical implications.

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Published

2021-12-30

How to Cite

Yan, Y., & James III, R. N. (2021). Framing the Annuity as Bequest Protection: An Experimental Test. Financial Services Review, 29(4), 277–291. https://doi.org/10.61190/fsr.v29i4.3463

Issue

Vol. 29 No. 4 (2021): Winter 2021

Section

New Original Submission

License

Copyright (c) 2021 Academy of Financial Services

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