Pros & Cons of Longevity Insurance

Purchasing longevity insurance is something that many individuals are starting to consider. This type of insurance coverage has several advantages and disadvantages. Here are a few of the pros and cons of longevity insurance.

Pros

One of the biggest advantages of this product is that it will allow you to spend more of your retirement money while you are newly retired. Many retirees tend to hold onto their money tightly because they do not know how long they are going to live. If you purchase longevity insurance, you have to worry about making your assets last only until you are 85. After that, your longevity insurance is going to kick in and pay for your living expenses.

This type of insurance can also be beneficial in covering extreme medical costs when you are over the age of 85.

Cons

One of the disadvantages of this type of policy is that you will have to devote some of your resources to investing in this policy instead of other investments. This could lead to missing out on profitable investment opportunities.

You also have to worry about the credit risk of the insurance company. If the company does not stay in business, you could potentially lose your investment.

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