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Haven Life (New York), a New York-based online life insurance agency startup, has launched 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. Developed by Haven Life as part of its mission to innovate in the life insurance space, AgeUp is issued by Haven Life’s parent company MassMutual (Springfield, Mass.).
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, notes Haven Life’s announcement of AgeUp’s debut.
“Traditional life insurance protects people from the financial strain of loved ones dying sooner than expected,” notes Blair Baldwin, General Manager for the AgeUp product. “AgeUp is the opposite: It protects people from the financial strain of helping support a loved one who outlives his or her resources.”
Haven Life reports that it acquired Baldwin’s team to rethink the buying experience for longevity products and, specifically, how income annuitization could help address the financial concerns of future retirees. The AgeUp team developed what they characterize as 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 adds. “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.”
Haven Life says that 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
To build a solution for parents’ longevity risk, the AgeUp team developed an annuity that differs from other annuities today in four key ways, as described in Haven Life’s product launch announcement:
-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. Age 85 is typically the oldest annuitization age for other products.
-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.
-AgeUp is the only annuity specifically designed for the intergenerational use case of adult children supporting their aging parents.
Simple, Straightforward and 100% Digital
Adult children pay the monthly premiums for AgeUp and receive the monthly payouts once the parent reaches the trigger age. Haven Life describes the AgeUp purchase process as simple, straightforward and completely digital. The firms says that guaranteed monthly payouts can be material, even for small monthly contributions.
The product 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, baby boomers in their early 60s and 70s will be able to purchase AgeUp directly, according to Haven Life.
Haven Life at Four: Innovative End-to-End Customer Experience