Longevity Insurance Can Help Those Worried About Outliving Their Money

With longer life spans comes the necessity to be sure your money is around at least as long as you are.  Longevity insurance – where you pay a certain sum to an insurer when you’re in your 60s in exchange for monthly payments 20 or more years down the road – is a lesser known insurance product that is growing in popularity, especially considering potential cuts to Social Security benefits and the absence of pension plans in corporate America these days.

According to the Society of Actuaries, for a relatively healthy 65-year-old couple, chances are 63 percent that one of them will live until the age of 90 and 36 percent that one will make it to 95.  Some financial advisors consider longevity insurance to be a good way to manage the risk of living to a ripe old age.

Longevity insurance is an annuity with a fixed income that kicks in at a specified future age, usually 85.  For example, a “maximum income” version of MetLife’s longevity insurance with a lump sum investment of $100,000 at age 65 would pay a woman a little over $59,000 annually once she reached the age of 85.  A man would receive more – just under $74,000 a year – because men have shorter life spans than women.

Under many longevity insurance policies, if you die before payments begin, your heirs are out of luck.  However, there are alternate versions that guarantee some death benefits to heirs, but they are usually more expensive at the outset.

To your family’s health, wealth and happiness!

David Feakes

P.S.  Want to get started on the most important planning you’ll ever do for your family?  Give our office a call at (978) 263-6900 to get started.  You’ll be so glad you did.

David Feakes is the owner of The Parents Estate Planning Law Firm, PC – a law firm for families in the Acton, Massachusetts area. David helps parents protect the people they love the most.  If you would like to receive David’s exclusive, free report, “Six Major Mistakes To Avoid When Choosing An Estate Planning Attorney,”  you can get it right here.


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At The Parents Estate Planning Law Firm, we answer your questions at your convenience; we stay in frequent communication; and we meet to discuss changes in life circumstances and in the law to ensure that your assets are protected.

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