Although financial services companies have developed a number of innovative products to protect lifestyles and provide financial security, there is one product that fills an important need—yet is not widely available. I’m referring to products that use health underwriting to provide guaranteed income for life for people in less than top health.
I am not referring to products for people in poor health, the bottom three deciles of the population by health. There are already products for them. Rather, I am referring to products for people in roughly the 30th to 70th percentile. These are the people who are somewhat “nicked up” by diabetes, high blood pressure, cancer, heart disease or other disease that are likely to negatively impact their life expectancy. These people face a retirement funding dilemma: they could live a long time, which makes it irresponsible for them to spend their savings prior to age 80, or they might not. Many will live far longer; it’s just unclear who those people are.