An insurance company does underwriting before issuing products affected by life expectancy; it's only logical you should do your own research - essentially your own form of underwriting - before before buying such products or making financial decisions such as the five outlined below.
1. When To Take Social Security
Social security doesn’t know your health history. If you live to your life expectancy based on standard tables, whether you take social security early or late, you’ll get the same amount. Knowing your personal life expectancy can help you play the system and make the best choice considering your individual circumstances.
Learn more:- Should I Take Social Security At Age 62
- Use Social Security Delayed Retirement Credits to Increase Benefits
2. What Pension Option to Take
When pension plans pay out as an annuity they offer you choices as to how to take your income such as life only or term certain. If you expect to live longer than average you’re best off taking a guaranteed lifetime payout. If your life expectancy is shorter, a lump sum or term certain option may make more sense. In these situations you also want to evaluate the impact and life expectancy of a spouse, and make sure you choose the option most likely to maximize your joint lifetime family income.
Learn more:3. Whether To Buy An Immediate Annuity
When you buy an immediate annuity, the payout is based on average life expectancy, not your personal health history. If you lead a healthy lifestyle and come from a long-lived family, insurance products like immediate annuities or longevity insurance may make more sense for you.
Learn more:4. How Much Inflation Protection You May Need
The longer you live, the more you’ll feel the effects of inflation at the gas station, grocery store and at the doctor’s office. People who are healthy when they retire are the ones in greatest need of long term care insurance, particularly policies with built in inflation riders. Creating inflation adjusted retirement income is also of the utmost importance. With a shorter life expectancy, it may not make as much sense to pay for these additional features.
Learn more:5. Whether To Keep Your Life Insurance
If you’re making a decision with big consequences, such as whether to cancel a life insurance policy, you may want to consider running a customized life expectancy report first. A lot of dollars are at stake, so just as an insurance company would do underwriting before insuring you, you should consider doing underwriting on yourself before making these types of decisions.
Learn more:- I’m Retired. Do I Still Need Life Insurance?
- Customized Life Expectancy Report – Item #5 In This List off 6 Ways To Estimate Life Expectancy
To conduct your own form of underwriting, work through a few of the life expectancy calculators or tables in 6 Ways To Estimate Life Expectancy.
Next: Planning Recommendations Based On Your Life Expectancy.
