Longevity Annuity

A longevity annuity is a type of income annuity with a deeply deferred payout period that commences well into the future. For example, a 65 year old person might purchase a longevity annuity with a payout period that begins at age 85. Longevity annuities are relatively new, but they represent a very powerful and efficient form of insurance. Longevity Annuities are often referred to as longevity insurance.

Annuity Duration

Duration is a measure of the time associated with cash flows or payments from a bond. Duration measures the amount of time (in years from the purchase date) required for a bond owner to receive interest and principal payments that are equal to the cost of the bond.

Long duration bonds have payments that are spread-out over a relatively long period of time (e...

The Case for Mutual Insurance Companies

The best interests of financial services consumers are much better aligned with a mutual insurance company than a stock insurance company.

Mutual insurance companies are owned by policyholders. Owners of an insurance contract issued by a mutual company are both customers and owners of the insurance company.

Stock-based insurance companies are owned by shareholders, so their focus is divided between customers and shareholders.

Mutual insurance companies are a form of cooperative where individuals voluntarily associate to form an organization that serves the mutual...

Who Provides Longevity Insurance

The U.S. longevity insurance market has been developing for almost a decade, and yet there are...

No Time for Guarantees

The concept is seductive: a financial product that provides upside exposure in the event that equity markets trend up and to the right while also providing a floor of protection in case the bottom falls-out from under markets again.

Sort of like having your cake and eating it too. Very tempting in light of the massive financial uncertainty that has existed for the past several years.

Products playing into this “upside plus protection” theme include (but are not limited to) variable annuities with guaranteed...

A Benchmark for Lifetime Income

The world is filled with investing indexes and benchmarks, and all professional investment managers measure their results relative to some type of performance standard such as the S&P 500.

On the retirement...