Longevity Insurance
 

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Longevity Insurance: What Is It and Do You Need It?

It’s called an annuity, stops paying when you die.

There is an old saying about annuities, they are never bought they are sold.

First my disclaimer - I think annuities are a bad place to put money - they are NOT an investment.

With that said, if you want to know a lot about them, I recommend you listen to the podcasts by Stan The Annuity Man called Fun with Annuities.

And should you want investment help, I recommend you take time to read Paul Merriman’s 3 FREE ebooks.
1. First-Time Investor
2. 101 Investment Decisions
3. Get Smart or Get Screwed (read this first!)

Found at paulmerriman.com

Also on his site are recommended portfolios for using Vanguard, Fidelity, T.Rowe Price or Schwab for DYI'ers. Much good info, ignore the puffery and sales pitches.

Are they bad because "...they are NOT an investment..."?

If an annuity is paying the annual earned interest one is expecting, let's say 6.5%....and it preserves their principal....and the client is happy.....why are they labeled bad.....by some folks?

(separate issue :mad:)

An annuity is a life insurance policy, not an investment. If you can get 6.5 percent with an annuity, and not lose principal, you can get a higher return by investing the money yourself because of the high annuity management fees. Also, any money you make with an annuity is taxed as ordinary income, not at the lower capital gains tax rate. There are also high surrender fees if you want your money back early.

But, for me, there are two things that should tell you that annuities are bad. First, the salesperson makes a huge commission of about 10 percent upfront for selling an annuity. And, second, the salesperson will not allow you to read the annuity contract before you sign it.

Very true

Because many/most see them as an investment, and, in fact, a variable annuity is sold as an investment.

As for good or bad, that is in the eyes of the client. What they are is a contract with the issuer, usually an insurance company, to but a stream of income for a period, might be a fixed term or might be for life of one or more people, and the better ones may offer a residual value if all the benefits are not paid out.

Point is, NOT an investment, a contract for a defined cash flow stream.

(at least thats my non-legal understanding)

I offer something much better------End of the World Insurance. PM me if interested:1rotfl::1rotfl::1rotfl:

Do you have the assets to pay me if this does happen?

My brother is a financial guy. When his sister in law and husband with dementia want into assisted living he took over their finances. She had an annuity paying her 1%!!!. Geez Louise.

That is why almost all are sold by someone who talks the buyer into doing this.

Nobody wakes up one day and says lets go buy an annuity.

Yes and she was a teacher. The annuity was in her IRA. Awful!

The guy is 89, diabetic and senile. He was a PhD physicist. Worked for U of Cal. Has PERS. She has teachers's retirement. They have lived high and each weighs close to 300 lbs. They needed to call EMTs when they fell. Huge Colorado house , "cabin" on 6 acres, $900K, Tucson house for winters but NO savings. Huge motorhome, PU Truck with camper, 1966 Scout, 1964 Pontiac, 1,200 lbs. in coins. But not sufficient cash to pay their income taxes. My brother has had his hands full.

The guy who sold it to her was a thief.