No. of Recommendations: 0
I hear that sort of comment a lot and it puzzles me. No one says "If you have good reason to think your house is going to burn down, fire insurance might be a reasonable bet." So, why only buy longevity insurance if you think you are very likely to live long? If the subject were fire insurance, would you post a link to a company that tests how combustible your house is? I thought the point of insurance was to cover low-probability, high-cost contingencies. Doesn't living to 100 fit that description?

You might live long, and it you do, you'll need more money than if you don't. You have 3 choices: 1) Don't provide for your financial needs after some age you pick as your probable death date, let's say 85 2) Save money to support yourself after age 85, which means if you die before 85 that money is wasted, or 3) buy longevity insurance, which means if you don't live past 85 that premium is wasted. Since the cost of longevity insurance is less than you would have to save to meet your post-age-85 needs, it's the most efficient way to cover the risk of living past 85. So, why is it considered "expensive?"
Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.