Longevity Insurance, also known as a Deferred Fixed Income Annuity, have become more and more popular.
They can be a possible strategy for those clients who are likely to live into advanced old age.
A Case For One
The case for buying Longevity insurance (also known as a Deferred Fixed Income Annuity) that would kick in if you live longer than a certain age.
For example, you could plan on your retirement plan fully funding your retirement years to the age of 85.
You could buy a Longevity insurance that would kick in on your 85th year to start to supplement your costs, thus buffering the need to live fully off retirement assets.
This may be a flexible strategy for someone who is anxious about outliving their assets.
For someone who would lose sleep over having their assets in a stock/bond mix, this would give them a floor, albeit a more expensive one, than what a bond/stock mix can guarantee (with, of course, there being no guarantee with a bond/stock mix).
Annuities have a reputation for having higher costs and fees, so having an absolutely clear understanding of those costs would be necessary before buying a deferred fixed income annuity.
However, it, along with Long Term Care Insurance, may provide more assurance for someone who is anxious about what their advanced old age may look like, regardless of whether they have children.
Next Step
Ready to take the next step and work with a fee-only CFP? Reach out to schedule a Discovery Meeting to learn more.