Annuities – Longevity Insurance


Annuities are taking a prominent role in the retirement income planning process, and part of the reason is protection against longevity risk (the risk of outliving your savings), according to article by contributor Jamie Hopkins.

Stocks, bonds, CDs and real estate CANNOT take longevity risk off the table.  Only some form of a lifetime income guarantee arrangement can – Social Security, a pension, or a lifetime income annuity.

In 2014, annuity sales in U.S. reached nearly $230 billion, representing a 3.8% increase over 2013 and a nearly 8% increase over 2012.

Insurance companies have enhanced their annuity offerings to include a wider range of benefits and features for consumers, since certain types of annuities are only suitable for certain situations.  Examples include bonus interest, increasing income (inflation protection), enhanced death benefits, and long term care benefits.

One particular type of annuity, often referred to as a “deferred income annuity”, or longevity insurance is the one product that has seen the fastest growth – from $211Million in 2011 to $2.7Billion in 2014!

Retirees with more sources of guaranteed income are happier, according to research. They are less concerned about finances when they know they have guaranteed income sources they know they simply cannot outlive.

With longevity insurance finally available in IRA’s and qualified retirement plans, where many people have most of their investable retirement assets, this tool should be considered when a lifetime retirement income is desired.

Retirement is personal.  Planning for it requires a licensed professional to review your goals and help you find the products that meet your needs best, based on your particular situation.  LNA Services can provide you with a no cost review, and more detailed information about annuity products that may help you meet  your retirement goals.


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