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New annuity aimed at adult children of aging parents

Insurance Forums Staff

One-third of 65-year-olds will likely live past 90, but many are underfunded for that long a life span and their families are often not prepared to cover the gap.

That’s why Haven Life Insurance Agency, MassMutual’s in-house startup, just introduced AgeUp, a new product designed to provide financial protection for the adult children of the boomer generation who are concerned about their parents outliving their financial resources.

“Traditional life insurance protects people from the financial strain of loved ones dying sooner than expected. AgeUp is the opposite: It protects people from the financial strain of helping support a loved one who outlives his or her resources,” said Blair Baldwin, General Manager for the AgeUp product.

AgeUp was developed by a group that is uniquely qualified to help protect Americans from outliving their retirement resources. Baldwin’s team at Quilt, a leading online insurance broker, was acquired by Haven Life in August of 2018 with a mission to rethink the buying experience for longevity products and, specifically, how income annuitization can help address the financial concerns of future retirees.

The AgeUp team developed what they believe is a first-of-its-kind annuity product that provides an overlooked customer base with a simple online solution for the retirement funds gap and brought it to life using Haven Life’s technology platform.

“More and more people are living into their 90s and beyond and there hasn’t been a financial product specifically designed to address the problem of adult children supporting their aging parents until now,” Baldwin said. “We set out to create a solution to help everyday Americans address this growing need, and found we could achieve this goal by creating a new kind of deferred income annuity we call AgeUp.”

AgeUp was designed after internal research with hundreds of potential customers, mainly Millennials and Gen Xers, which revealed:

  • 71% believe at least one parent or in-law will live longer than average
  • 57% have a relative who lived to age 95 or beyond
  • 64% expect to financially support their parents or in-laws in their old age
  • 35% think their parents will run out of money between the age of 90 and 100

In order to build a solution for parents’ longevity risk, the team behind AgeUp developed an annuity they say differs from all other annuities today in four important ways:

  1. AgeUp is designed for financial protection for life after 90, and as such, is the only annuity that converts into an income stream for life beginning at age 91 or later. Age 85 is typically the oldest annuitization age for other products.
  2. AgeUp is the first annuity to be financially accessible to nearly everyone, with no upfront contribution required and monthly premiums starting as low as $25.
  3. AgeUp is the only annuity specifically designed for the intergenerational use case of adult children supporting their aging parents.
  4. Adult children pay the monthly premiums for AgeUp and receive the monthly payouts once the parent reaches the trigger age. The purchase process is simple, straightforward and 100% digital. The guaranteed monthly payouts can be material, even for small monthly contributions.

AgeUp was recently approved for sale in 44 states, Washington, D.C. and Puerto Rico, with plans to reach even more of the population by the end of 2020. In 2020, Boomers in their early 60s and 70s will be able to purchase AgeUp directly. Learn more at age-up.com.



4 thoughts on “New annuity aimed at adult children of aging parents”

  1. Really curious what Annuity products limit annuitization past age 85.

    Most Annuities on the market allow annuitization up to age 95. Maybe not Mass… but most others do.

  2. alohakevin

    Who faces the tax cosequence? What if the boomer dies? As if this cant be done already. This is marketing not problem resolution.

    I am certain that because the child wants to be the owner to control the policy & also keep the parent from being the owner for Medicaid Spend down for nursing home, the child will be the owner & therefore the tax reporting of deferred gains at surrender, death, maturity or income stream will be reported to the child who owns it. Child would be owner, beneficiary, payor of premiums & payee of payout annuity checks. Parent would merely be the annuitant with their date of birth/gender determining the payout check amounts.

    In terms of "what if the boomer dies", I think it will depend on the chosen payout selected at time of purchase. If max check amount of Life only, there would be no money at death of the boomer annuitant. If Life with installment refund, they would receive at least what they deposited.

    Tend to agree with you that this is not really as new as they are making it sound other than how they are going about marketing the idea of basically a DIA with different owners. Possibly the unique part is the tax code on this specific annuity being annuitant driven & not owner driven as to when a death claim would be required to be paid out by IRS tax codes

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