Baby Boomers are just becoming aware that when they retire and because of greater life expectancies, they will probably need a steady income steam for at least 25 years, maybe for as long as 35 or more.
Thus existing products such as annuities will be getting increased attention, but there are also new products designed to appeal to those worrying that they will outlive their savings. One is longevity insurance.
The name is a bit of a misnomer because, in reality, it is more of a one-time payment annuity that begins to pay off if and when the “insured” reaches a certain age, with payments continuing until death. It has been reported, in another variation, that providers have simply added a longevity element to some of their annuity offerings.
These new products illustrate the demand that is only expected to grow in response to the need to protect existing assets, and to ensure a steady stream of needed income for decades. That is also why, for example, you see many individuals working beyond 65 to obtain employer-provided medical insurance, and the purchase of Medigap and long-term insurance policies. You can expect more questions from your clients about the advisability of purchasing an annuity, and, in not to long, queries about longevity insurance.
All of this indicates that there is a growing belief by some that their investments will simply not perform well enough by themselves to provide for their anticipated income needs until death. Even if this belief isn’t well founded, you can expect some clients don’t want to have to worry about that possibility during their retirement. With that in mind, expect a marketing onslaught with products like longevity insurance that alleviate the concern that eventually the income stream will run dry.
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