The article examines how different strategies for hedging against changes in life expectancy can affect the cost and effectiveness of providing annuities. By analyzing data on different socioeconomic groups, the researchers found that eliminating basis risk in hedging can make it more cost-effective for annuity providers. This means that by reducing uncertainty in life expectancy predictions, providers can offer more stable annuity payments without significantly increasing costs. In fact, the extra return needed to cover the expenses related to hedging longevity risk is relatively small, at most 0.16%.