Longevity Insurance

Action to take

Consider longevity insurance.

Why

Only a third of Americans say they would like to live to 100.
Their reasons include fearing they will run out of money and be poor.

In a previous blog I cited a British man who bet $200 he would
live to 100 and eventually received $50,000 for winning his bet.
Since then the odds makers want to increase the target to 110 years old.

But there is a relatively new way to win that kind of bet – longevity insurance.

Personally, I dislike life insurance as I hate betting against myself.
You (or rather your survivors) only get the money if you die.
Longevity insurance rewards you for living longer and helps make sure
you have enough income starting at age 85. For example, let’s say a
65-year-old man pays $50,000 in after tax money for a longevity policy.
At age 85 he starts collecting $3,614 a month ($43,368 a year)
for the rest of his life.

If he dies before age 85 he and his heirs receive nothing. For women,
the monthly payments would be somewhat lower because of a longer
life expectancy. Of course you can purchase the insurance before age
65 and receive even higher monthly premiums at 85.

At age 65, life expectancy for American men (2004 data) was
82.1 years and women 85 years. Met Life, Hartford, and other insurance
companies are betting that in most cases they won’t have to pay anything.

You could take the same money and invest it in stocks or bonds.
That would allow you to take money out in an emergency and to
pass on money to heirs. If you get a 6% after tax return rate
on your investments compounded over 20 years, you would start
coming out ahead a shortly before your 90th birthday
with the longevity insurance.

The primary advantage of the insurance is less concern about outliving your money.
It also might be out of reach in the event of a lawsuit or divorce. Unlike life insurance,
you don’t need to qualify, you only need a birth certificate.

The biggest risk with longevity insurance is not living to 85 and collecting nothing.
Another risk is the insurance company could go out of business.

Another consideration is the likelihood of inflation. Whether you invest the money
in an IRA or have longevity insurance, the money will probably have far less purchasing
power in 20 years. At 4% inflation compounded annually, $1,000 in today’s money
would be worth $456 in 20 years. In our previous example the monthly payment
would be equivalent to $1,648 in today’s dollars and each year the value would be a little less.

With life expectancies likely to increase, purchasing longevity insurance in the future
is likely to bring lower monthly benefits than are being offered now. If you believe
you have a good shot at living to 100 or older, longevity insurance can be a good bet.

Quotes

Corporations often purchase “key man” insurance on staff they can’t afford to lose.
Think of yourself as the key man or woman in the business of your own life.
But rather than buy life insurance, do what it takes to live longer and healthier.
~Mike Brickey

Humor

My wife and I took out life insurance policies on each other,
so now it’s just a waiting game.
~Bill Dwyer

The insurance man told me that the accident policy covered falling off the roof,
but not hitting the ground.
~Tommy Cooper

Can atheists get insurance for acts of God?

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Anti-Aging Psychologist Dr. Michael Brickey is keynote speaker and author of the Oprah-featured book, Defy Aging and 52 baby steps to Grow Young. The books and his Reverse Aging anti-aging hypnosis CDs comprise his anti-aging system.

Coping with Dying

Action to take

Know what is helpful to talk about when someone is struggling with dying.

Why

The ideal is to be like to Energizer Bunny on Alkaline batteries.
He just keeps going and going and going at full power and then dies suddenly.

For many people, however, dying is a long drawn out process.
Cancer and many other chronic illnesses can raise a lot of why questions
and foster depression.

One of the key coping skills for living a long, healthy, happy life
is coping with loved ones dying. What can you say to comfort someone
who is having a tough time dying?

We all want to think that our lives mattered and we played our hands well.
Presidents worry about the legacy they will leave. For people who believe
there is place in heaven waiting for them, the task usually is easy.
For other people, emphasizing three points usually helps:

1. You helped a lot of people and touched a lot of lives.
Give specific examples. Rearing children is an obvious example,
but so is mentoring, great friendships, volunteer work, donating blood, etc.
When people are dying, they usually focus on family and relationships
as opposed to work. Consequently, contributions to the profession
usually don’t resonate except for professors, politicians, and founders.

2. You did honest, needed work. It helped a lot of people and
made the world a better place. While there are crooks and shysters,
most people’s work made the world a better place and they should take credit for it.

3. You went many places, did many things, and met fascinating people.
You heard a lot of music, saw a lot of beauty, and enjoyed life.
In short you lived a full life. (Note: How you word things can make
a big difference. If you talk about living fully, an unhelpful “yes-but”
inner voice often objects with things they didn’t get to do.)

If one of the points doesn’t fit, emphasize the other two.

Quotes

What we do for ourselves dies with us.
What we do for others and the world remains and is immortal.
~Albert Pine (a 19th-century English author)

To be what is called happy, one should have
(1) something to live on,
(2) something to live for,
(3) something to die for.
The lack of one of these results in drama.
The lack of two results in tragedy.
~ Cyprian Norwid (a 19th-century Polish poet)

Humor

On the plus side, death is one of the few things that can be done lying down.
~Woody Allen

For three days after death, hair and fingernails continue to grow,
but phone calls taper off.
~Johnny Carson

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Anti-Aging Psychologist Dr. Michael Brickey is keynote speaker and author of the Oprah-featured book, Defy Aging and 52 baby steps to Grow Young. The books and his Reverse Aging anti-aging hypnosis CDs comprise his anti-aging system.

You Bet Your Life

Action to take

Bet someone you will live to 100 (or older).

Why

250:1 odds. I’d love to take that bet. Ten years ago Englishman Alec Holden
placed a £100 bet with his bookie that he would live to 100. He recently
cashed in on that $200 bet and received $50,000.

You won’t be able to get the 250:1 odds these days. Rupert Adams,
spokesperson for the the bookie, said, “When we started taking these
bets, 100 years old seemed to be an almost mythical landmark and we
were prepared to offer massive odds. But these age wagers are starting
to cost us a fortune and from now on we are going to push out the age
to 110.” The US Census Bureau says the US had 75,000 centenarians
in 2000 and will have 170,000 in 2010 and 1.2 million in 2050.

Don’t you just hate to lose a bet? A lot of people will put a lot of
effort into making sure they win a bet. So why not bet on yourself?
Personally, I have always disliked the idea of life insurance asking me
to bet against myself. Betting you will live to 100, 110, or even 150
puts the incentive where it belongs. And you want to be there for payday.

Quotes

Money won is twice as sweet as money earned.
~from the movie, The Color of Money

Humor

Americans spend $300 billion every year on games of chance;
and that doesn’t include weddings and elections.
~Argus Hamilton

I’m am an only child.
I used to have a brother but my parents gambled a lot.
~Rita Rudner

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Anti-Aging Psychologist Dr. Michael Brickey is keynote speaker and author of the Oprah-featured book, Defy Aging and 52 baby steps to Grow Young. The books and his Reverse Aging anti-aging hypnosis CDs comprise his anti-aging system.