By Steven H. Kobrin, LUTCF
December 19, 2005
Copyright © Steven H. Kobrin, LUTCF.
All rights reserved.
Longevity risk is very simply the exposure to outliving your money.
Every generation is exposed to longevity risk, and the baby boomers are no exception. But the boomers face some unique dimensions to this problem, such as the rising cost of medical services and future market volatility.
Also, as more and more employers cut back on retirement plans and place the burden on the individual employee, large numbers of individuals will have to take responsibility for their retirement savings.
In this situation, it's critical for people to begin saving as soon as possible. However, to meet current expenses, many people postpone saving for the future, and they enter their retirement years with insufficient resources.
To make matters worse, many retirees opt for a lump sum or single distribution option from their corporate retirement plan. They do this because they want the maximum monthly income currently available from the plan. But this type of distribution covers their own lifetime only.
Were they to choose the distribution option of spreading the income over two lifetimes - their own lifetime and their spouse's lifetime - the monthly payout would be smaller. And perhaps it would be too small to cover their current expenses.
If you haven't adequately saved for retirement, the surviving spouse may be left stranded. This is an especially great problem for someone in his or her seventies or eighties - and is not able to reenter to work force to pay current expenses.
For this reason many baby boomers use life insurance as a retirement supplement. They take out a life insurance plan to fill the gap, to protect their surviving spouse. Truly, the addition of a life insurance benefit can well make the difference.
In my professional experience, the product of choice in these cases is a permanent product with a guaranteed premium and death benefit to age 100 and beyond.
This is the product that will protect your surviving spouse for the rest of his or her lifetime, providing the retirement and peace of mind you'd hoped for in your golden years.
Copyright © 2001-2008 by Steven H. Kobrin, LUTCF. All rights reserved.
Steven H. Kobrin, LUTCF, is an independent life insurance broker and recognized expert in the field, serving as a preferred life insurance quote provider for many professional advisors and their clients, including attorneys, accountants, financial planners, and loan officers.
Experienced at patiently helping people through the life insurance maze, Steve is glad to share his perspective with the public and he warmly welcomes all emails and phone calls from consumers and consumer advocates.