Protect Your Health By Protecting Your Retirement Savings

Jul 1, 2018 8:46:00 AM / by Darwin Bayston, CFA

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(NAPSI)—Anyone who has ever seen a retirement account take a hit during a recession or stock market correction knows firsthand that it takes a mental and emotional toll. New research, however, has discovered that it also makes you sick.

An article published in the prestigious Journal of the American Medical Association, based on a study of how 8,714 adults fared over a 20-year period, concluded that a “negative wealth shock” can increase an individual’s risk of dying within the next two decades by more than 50 percent.

As The Wall Street Journal explained, “losing one’s life savings in the short term might curtail one’s life span in the long term.”

What Can Happen

It’s not entirely clear to researchers how the loss of retirement savings can damage your health—perhaps it’s related to increasing blood pressure or cardiovascular events—but the scientific findings are consistent with a growing body of knowledge:

• The Population Reference Bureau studied the effects of the Great Recession of 2007 to 2009 on older Americans’ health and well-being and found that financial losses during that time translated into a higher risk of mental and physical health problems with potential long-term consequences.

• The Federal Reserve released a briefing paper in 2013 that found “lower levels of life satisfaction” correspond to “greater levels of financial stress”—58 percent of older adults who said they were not very satisfied with life also reported having major financial stress.

What You Can Do

There is no magic bullet to prevent your retirement savings from being depleted by a major financial shock. Economic downturns are inevitable, stock market volatility is rising and unexpected expenses—such as a sudden hospital bill or home repairs—can wreak havoc on even the very best retirement funding plans. One option for coping with a negative financial shock is to unlock hidden value from everyday assets you may no longer need.

For example, many seniors are surprised to learn that one potential asset for generating immediate cash is a life insurance policy. A life insurance policy is considered your personal property, so you have the right to sell that policy anytime you like. When a consumer sells a policy—something called a “life settlement” transaction—the policy owner receives a cash payment and the purchaser of the policy assumes all future premium payments, then receives the death benefit upon the death of the insured. Candidates for life settlements are typically aged 70 years or older, with a life insurance policy that has a death benefit of at least $100,000.

If you own a life insurance policy you no longer need or can afford, you may be able to protect your retirement savings—and your personal health—by selling that policy for immediate cash.

Learn More

For further facts about life settlements, visit www.LISA.org or call the LISA office at (888) 793-3946.

Darwin Bayston, CFA

Written by Darwin Bayston, CFA

Darwin Bayston is President and CEO of the Life Insurance Settlement Association (LISA). His charge is to extend the outreach of the Association to all participants of the life settlement industry from consumers to capital providers, including producers, brokers, providers and service providers who are part of the life settlement market. He was previously Managing Director of Life Settlement Consulting & Management (LSCM), founded in 2004 and specialized in life settlement policy and portfolio valuations, and life expectancy analysis. He has published several articles and participated as speaker at a number of life settlement conferences. Previous to that he operated an investment advisory firm. From 1980 to 1993, he served in several capacities, including President and CEO the CFA Institute (and its predecessor organizations). While at CFA, he founded the continuing education program, was editor of the CFA Digest and supervised research projects funded by the Research Foundation of the ICFA. He began his career as an investment analyst with a Midwest life insurance company. Mr. Bayston has been Chairman of the Martha Jefferson Hospital Foundation ($100 million), a member of the Hospital’s Finance Committee and a past member of the Board of the Institute for Quantitative Research and Finance (Q Group).