New technology will allow you to apply for life insurance with a “selfie.” In other news, inflation-protected annuities are becoming more appealing as the economy grows.
How Your Selfie Could Affect Your Life Insurance (Southern Business Journal, May 7)
Applying for life insurance can be a lengthy process, often requiring medical exams. However, new technology is exploring the use of facial analytics programs that gather pertinent information from a selfie the applicant uploads online to the insurance company. Currently being tested by several unnamed companies, the technology would allow consumers faster access to policies without having to have a physical examination.
Is It Time to Invest in Inflation-Protected Annuities (U.S. News and World Report, April 25)
As the economy continues to strengthen and recover, inflation continues to rise. For investors nearing retirement, the risks of inflation and the effects on purchasing power come into play. “Inflation-protected annuities are designed to help mitigate both inflation and longevity risks to a retiree’s income”, however, these annuities come at a premium. Investors need to “consider how much they’re willing to pay for the security of guaranteed retirement income.”
A Top Financial Adviser Explains Why He Thinks Annuities Are a Raw Deal (Business Insider, April 21)
Ric Edelman, of Edelman Financial Services, analyzes certain annuities and explains why he thinks they are not in the best interest of consumers. Low interest rates, taxes and dependency on the insurance company’s financial health are three main reasons investors need to be wary of annuities. “Annuity products are a very common sales pitch because they generate big commissions for the guys who sell them to you, but they’re not in your best interest at all.”
Considering Annuities as Insurance (Plansponsor, April 12)
Investors transitioning to retirement have probably heard the pitch for annuitizing. However, “income annuities are not investments and they really should not be compared to an investment…Income annuities are more properly considered as insurance – insurance that guarantees an individual will not run out of money no matter how long they live.”
Lump Sums or Annuity Payments? It’s No Easy Decision (USA Today, April 26)
Many factors influence the decision to take a lump sum or annuity payments. “As a general rule, people in good health and those with high family longevity should consider taking annuities…annuities can also make sense for people with low risk tolerance and those not overly concerned about leaving money to beneficiaries.” Retirees should also consider whether annuities can fill any income gaps that other sources might not cover.
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