Home equity represents a reserve that can be used for providing additional
money for its owners during their retirement. Life insurance models can be
successfully applied to model home equity conversion loans. The home equity
conversion loan is a financial product that provides a certain flexibility by
using home equity as a resource for a quality life during retirement. Home
equity conversion loans do not have a predetermined maturity date, as do
conventional loans. But, like every loan, it must be repaid. One potential
advantage of using a home equity conversion loan during tough financial times
instead of some types of need-based assistance is that eligibility is
straightforward. Home equity conversion loans can be useful tools in the
process of pension system reform.