The projection of human mortality has always been a fundamental subject in actuarial research. Because of the clear downward trend of mortality rate in all ages, traditional actuarial fairness which rely on static life tables have difficult in meeting the requirements of insurance product pricing and risk assessment, what’s more, the risk management and sound operation of insurance companies will be seriously affected. Consequently, this article will try to explore the coping strateg from the perspective of stochastic modeling of mortality and innovation of mortalityderived products. First, this paper will build a stochastic modeling of mortality with a jump process, and use the Bootstrap method and maximum likelihood estimation method to estimate the parameters in the model based on the actual mortality data of China from 1995 to 2019. Secondly, this article innovates in product design: Embedding a European option of mortality in annuity products which grants insurance companies the right to adjust the compensation when actual mortality deviates too much from the predicted mortality. The results show that the embedded mortality options can effectively disperse longevity risk and has important practical significance and reference value to promote the development of commercial annuity.