I believe the first key to longevity insurance is the fact that the centurion is the fastest growing segment in society. 30 years ago it was almost unheard of for someone to live to age 100 and today it’s a daily occurrence. The life insurance industry re-evaluated their life expectancy tables to increase the tables from age 100 to age 120 to accommodate the aging society. Also, many of the problems with the noted options for Longevity Insurance can be overcome by newer designs. For example, the WSJ article by A. Todorova appeared to accept the idea, but had concerns over several issues like: death benefit, inflation, and liquidity. The good news is that there are now options outside of MetLife, John Hancock, Integrity and New York Life that do allow for a full death benefit and potentially some inflation should the insured die prior to income. They will also guarantee a full return of premium once payments begin if the appropriate option is chosen. Finally one policy says that should the insured need access to cash in an emergency then they would be allowed to up to 30% of all future payouts in a lump sum.

I obviously have embraced the idea of Longevity Insurance. It’s not for everyone and it’s definitely not appropriate for the bulk of one’s retirement, but it’s a great way to diversify and create an ‘ace in the hole’ for tomorrow.

I think the name “longevity insurance” is a misnomer. With other insurance I have, I always hope I don’t need them. With logenvity insurance, I hope to use it:-)

Seriously, I’ve been looking into this and am working with my financial advisor on this. There are some pros to a “deferred longevity annuity,” which is shared in Stephan Pollan’s book Die Broke – i.e. not burdening one’s children should one outlive one’s nest egg.

One main risk that I see it that most annuities are dependent on the stock market. Associated with the stock market risk is the other main risk of whether the company will be around or able to pay in 20 years.

Since I am still young, I do not need to make the decision yet. But I am still considering, especially if the product improves by the time I am 65.

I would think that you are entitled to the income no matter what your mental faculties. And yes, I suppose keeping someone alive is a possibility. However, I would think the cost of care would be prohibitive in the long run.

Lots of our assumptions about personal finance will get truly weird if LE techs move as quickly as they appear to be.

Life expectancy has increased by around 4 years from 1980-2004 (http://www.cdc.gov/nchs/data/hus/hus06.pdf#027). Are we more likely to reach ages above 85 with the technological changes that will come in the next 20 years?

Do you receive the income regardless of your mental/physical condition? If so, is there any risk in someone keeping grandpa on life-support in a vegitative state so that they can continue to take his checks?