One thing that I would be interested in as a part of such a strategy is a term life insurance policy that lasts for about 25 years with very low counter party risk and an index to inflation that’s relatively immune to political shenanigans.
I’ve never seen inflation-indexed life insurance. If you expect 4% inflation to continue throughout the course of your 25 year term, it might be easier to just buy a bit more than double the amount you need. The more initially expensive option would be to get universal life, which you could set up to allow expanded benefits with more payments; and which you can fund enough to be self-sustaining. That has obvious benefits in comparison to term if you’re expecting to die old, after years on a fixed income with indeterminate medical expenses.
Do you have a suggestion for what to do if I’m trying to hedge against a scenario where the fed manages inflation at less than 6% for most years (as it has done since 1983), but then a debt crisis (or whatever) produces N years of 10%-100% inflation between now and the time I would need the money?
I’ve thought of just insuring for like $3M to be safe, but that costs more and gives me a giant pile of money in scenarios where I have no striking need for the giant pile of money (and it doesn’t even hedge against counter-party risk in the event that things get ugly and the ugliness bankrupts a business-as-usual insurance company I had relied on to survive). I’d prefer to transfer excess life insurance payouts from futures that avoided hyperinflation to other futures where no financial crisis happens and instead nimble investment money is important for participating in the benefits technological growth. “Just buying more insurance” seems like an expensive way to accomplish less than half of what I’m interested in.
It seems an insurance company staffed with financial wizkids should be able to invest in a thoughtfully chosen package of TIPS, oil futures, renminbi, and similar instruments to provide exactly the kind of life insurance that I want, but I don’t know where to shop for such a service if it already exists and I don’t yet have the pragmatic financial knowledge to create such a service by my own initiative if it doesn’t.
I’ve never seen inflation-indexed life insurance. If you expect 4% inflation to continue throughout the course of your 25 year term, it might be easier to just buy a bit more than double the amount you need. The more initially expensive option would be to get universal life, which you could set up to allow expanded benefits with more payments; and which you can fund enough to be self-sustaining. That has obvious benefits in comparison to term if you’re expecting to die old, after years on a fixed income with indeterminate medical expenses.
Do you have a suggestion for what to do if I’m trying to hedge against a scenario where the fed manages inflation at less than 6% for most years (as it has done since 1983), but then a debt crisis (or whatever) produces N years of 10%-100% inflation between now and the time I would need the money?
I’ve thought of just insuring for like $3M to be safe, but that costs more and gives me a giant pile of money in scenarios where I have no striking need for the giant pile of money (and it doesn’t even hedge against counter-party risk in the event that things get ugly and the ugliness bankrupts a business-as-usual insurance company I had relied on to survive). I’d prefer to transfer excess life insurance payouts from futures that avoided hyperinflation to other futures where no financial crisis happens and instead nimble investment money is important for participating in the benefits technological growth. “Just buying more insurance” seems like an expensive way to accomplish less than half of what I’m interested in.
It seems an insurance company staffed with financial wizkids should be able to invest in a thoughtfully chosen package of TIPS, oil futures, renminbi, and similar instruments to provide exactly the kind of life insurance that I want, but I don’t know where to shop for such a service if it already exists and I don’t yet have the pragmatic financial knowledge to create such a service by my own initiative if it doesn’t.