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Americans Gain Two Years Of Longevity

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Anybody who is following longevity matters will probably be captivated by this piece of news from the Society of Actuaries (SOA). People are living even longer than formerly projected. That’s based on substantial data SOA received from private, uninsured pension plans in the U.S.

Take a look: SOA’s newly updated tables and mortality improvement scale show that among males age 65, overall longevity rose 2 years — from age 84.6 in 2000 to age 86.6 in 2014.

For women age 65, the new data show that overall longevity rose 2.4 years — from age 86.4 in 2000 to age 88.8 in 2014.

But whoa, don’t race off and start applying those findings to whatever marketing and sales presentations you may be working on today.

Although the 2014 tables form a new basis for the measurement of retirement program obligations in the United States, SOA says they “are intended for use in connection with actuarial calculations related to pension and other post employment benefit programs.” The actuarial team did not assess applicability to other purposes, it adds.

With that caveat in mind, I’d say this study is definitely worth taking seriously. It reflects approximately 10.5 million life-years and 220,000 deaths between 2004 and 2008, making it comparable to the data set used in 2000 to develop the SOA’s previous mortality tables. In addition, the SOA’s Retirement Plans Experience Committee developed the data over five years, with the help of two independent review committees, expert peer reviewers, and commenters who weighed in during in a four-month comment period.

Based on the data, the SOA estimates that private pension plan liability could increase by 4 percent to 8 percent, although the average cost impact will vary “greatly” by plan design and demographics.

For the non-actuaries in the business, the natural question to ponder is whether other studies will come out corroborating the longevity trend spotted in this private pension study. If so, what will that mean for the life and annuity business?

It will probably mean continued expansion of issues and needs the industry been wrestling with for at least the past two decades. These include an expanding elder pool, a continued strain on social insurance systems, greater demand for elder care services, more sandwiched households and multi-generation family arrangements — and yes, growing demand for insurance, financial and retirement-related products and services for the gray-haired set.

It will mean one more thing too. That is a growing demand for advisors who actually like older people and who have the skill sets to work with them. Those advisors will be the industry superstars in the years ahead. Those folks will see opportunity roll out before them like a red carpet.

Occasionally I hear people with little to no expertise in longevity trends chatting about increased longevity in an amazingly casual way. Some believe the living-longer trend will probably “level off soon— unless some really awesome medical breakthrough comes about.” All will be well, they say. They know, because their “gut” tells them so.

In view of all the data I see on aging and longevity in America, I barely keep my jaw from dropping when I hear such comments.

Pew Research seems to have detected a more relaxed perspective on aging in America in its January report on global aging, too. Americans are more “sanguine” about aging than citizens in most other countries, the researchers found. This is even though projections show that “people age 65 and older will eclipse the share of children younger than 15 by 2050.” Pew’s take is that the U.S. is aging at a slower pace than most other countries. Hence, the comparatively relaxed attitude.

For now, insurance experts have this new SOA study to peruse. The findings open the door a little wider to expectations that, if a leveling-off period in longevity is on the way, it probably won’t occur tomorrow.

 

 

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Linda Koco, MBA, is a contributing editor to InsuranceNewsNet, specializing in life insurance, annuities and income planning. Connect with Linda →

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