News Resources for Seniors

Some Americans turning to longevity insurance in later years

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As life expectancy for the average American continues to rise, many people are dealing with the possibility of their money running out, according to the Associated Press.

While various forms of financial coverage like social security, pensions and life insurance policies can provide peace of mind for the aging, some financial advisers now say that older Americans may want to consider longevity insurance, which can provide financial assistance to people who outlive their benefits.

Typically packaged in the form of an annuity, longevity insurance might be a good idea for a retirement-age individual with the means to purchase a lump-sum annuity that will pay out when he or she reaches a certain age, typically 85.

To some extent, the investment is a gamble, the AP notes, because if you die before you're eligible to receive benefits, the money is gone. Most of those currently insured under longevity plans are investors who use the annuity as leverage, allowing them to invest in other areas more actively and aggressively in their later years - the longevity insurance essentially acts as a safety net.

While it has seen some improvement in recent months, overall, the insurance market took a significant hit in the wake of the economic downturn. Premiums fell by nearly 16 percent in 2010, and some analysts say now is an excellent time to consider a plan.

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