Advisors Need To Initiate Longevity Talk

InsuranceNewsNet

By David Dankwa

InsuranceNewsNet

Even though Americans are living longer, the risks and financial responsibilities associated with longevity are not frequent topics of discussion for many middle-income Americans.

In fact, according to a new study conducted by the research arm of Bankers Life, more than 87 percent of middle-income Americans age 55 and older, do not spend much time thinking about longevity even though they expect to live to 86 years, irrespective of gender, income or health.

The survey consisted of a sampling of 500 Americans between the ages 55 and 75 with annual income of between $25,000 and $75,000. The results showed only 50 percent were talking about longevity with their spouses, said Chris Campbell, vice president of marketing and business development at Bankers Life.

About a third stated they are having the discussion with their children, and only 21 percent said they had discussed the issue with a financial advisor, Campbell told InsuranceNewsNet.

“I found these numbers to be shockingly low,” he said. “I think creating some awareness could go a long way to helping folks prepare better.”

Campbell said it is imperative that professional advisors, including brokers and agents, have a conversation with clients about longevity.

“If a professional advisor is supposed to be assisting with someone’s retirement planning, how can they possibly do the job without having some discussion on longevity?” he said.

Advisors are well positioned to initiate this dialogue with clients, said Campbell. For example, they should be able to ask a client if they have spoken about longevity with their family or how do family members feel about the client living longer. “You can ask these simple questions before discussing the consequences of a long life,” he said.

Living longer has its rewards, but it also comes with risks. The study showed that for middle-income Americans, the two primary concerns of living longer are declining health and the ability to create a sustainable retirement income.

More than half -- or 55 percent -- of the middle-income Americans surveyed had saved less than $100,000 for retirement and 19 percent had saved less than $10,000. Campbell said this result explains why many seniors expect to work in their retirement age.

However, being able to work in retirement also requires a retiree to maintain good health – which comes with its own complications, he said.

According to an earlier survey conducted by Bankers Life, when faced with financial constraints and rising health care costs, one of the first things retirees do is stop preventive care, including normal visits to the doctor. “It is the absolute worst thing to do when you are trying to maintain your health and limit surprises,” said Campbell.

Ultimately, all of these issues can be addressed, perhaps even avoided, if seniors begin to have the longevity discussion earlier rather than later, he said.

As life expectancy rates of Americans continue to increase, Campbell said he hopes more than half of middle-income Americans begin talking about longevity with their spouses.

Certainly, more than a third should be talking about it with their children, especially since many of the same children are going to bear the burden of caring for their own children as well as their aging parents, he said.

David Dankwa is a longtime business reporter with significant experience writing about the global insurance industry. Contact him at [email protected].