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Understanding Longevity Insurance

Many people today have never heard of longevity insurance, but it is something everyone should understand.  This is a relatively new insurance product and not all annuity suppliers understand how it works.  It's basically an annuity where you make a lump sum payment and your money is held for a particular period of time.  If you are still living at the end of this pre-determined time, you receive annuity payments for the rest of your life.  It can be seen as risky if you pass away before the end of the period and receive no benefit.  A good side of the this product involves taking smaller payments in the future and adding death benefits or adding your spouse onto the policy.  There are a lot of options with longevity insurance, but it can be a complex product.

J. Brendan Ryan wrote "Longevity Insurance May Be For You" on Cincinnati.com and talks about all of the risks associated with retirement these days.  Millions of Americans are not prepared for their retirement years, and without knowing how long you will live, it can be hard to gauge how much money you should save.  Annuities and retirement insurance products can be a great way to mitigate financial risk during these years.  They often provide a lifetime source of income that won't change if you live longer than you thought.  This is often referred to as a "mortality gain".  And conversely, if you die earlier than you planned, you will experience a "mortality loss".  Annuities can be thought of as longevity insurance to remind you how important this product can be for financial security during retirement.  Many consider this type of insurance even more valuable that typical life insurance policies since you reap the benefits while you are still living.  Life insurance is an important product, but basic policies are to supply benefits to loved ones after you are gone.  Take the time to talk to your financial advisor about longevity insurance and annuities to secure your retirement future now.

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