Risk transfer is an important element of the wealth management process. When you pay another party to insure against catastrophe, it can be a good move
Paying an insurance company a reasonable amount to ensure that you won’t go broke in retirement can also be smart. The cost, which is your agreement that your heirs will receive nothing upon your death, can be a non-issue when compared to the potential benefit
We pay property and casualty insurance companies to indemnify us against catastrophic loss of home and car, and life insurance companies to make our families whole in the event of our premature death. Fixed annuities can provide similar protection against loss due to longevity.