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Insured Income

Insurance will be covered extensively in both Chapters 6 and 9, but we will address the use of insurance as a method of guaranteeing income here. In a broad sense, you can look at income insurance in the same manner that you would look at any other type of insurance that is as protection against a loss. In this case, the loss is really the replacement of income from our traditional job from which we are retiring.

As the first of 77 million Baby Boomers approach retirement age, the insurance industry is preparing for the opportunity to provide insured income to this enormous market. Insurance companies have provided guaranteed annuity income to consumers since 1772, but historically, these guaranteed income streams have been expensive and have not offered the consumer liquidity. In other words, once an income stream had begun, the consumer was committed to that income stream for a specific period of time or, more commonly, for the rest of his or her life. In recent years, the industry has reinvented itself to be in a position to support the market with more innovative products designed to meet the income needs of retirees.


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