This may sound a little strange but you can actually buy insurance for living too long, from a retirement perspective. According to Yahoo Finance, you might be able to buy a longevity insurance policy at 65 for $25,000 that pays out $3,000 a month for every month after your 85th birthday. How does that compare to investing the $25k yourself? Yahoo did the math and after 20 years your $25k works out to be $116,524 at 8% appreciation a year; if you start withdrawing at 85 and the balance earns 4%, it’ll last less than four years.
This is one of five ways Yahoo recommends that you hedge your retirement bet, giving yourself some protection if you live too long, which currently is a big risk for those retiring. There are downsides to these plans though such as high fees, be sure to check those before you buy, and the fact that if you perish before 85, you get nothing.
Still interested in Longevity Insurance? Give MetLife, the Hartford and New York Life a call.
Source: Yahoo Finance