Wednesday, August 17, 2005

Life’s a Beach, Part 2...

In Part 1 we looked at how life expectancy has improved over the years, as well as some of the reasons that it’s not even longer. One prediction in particular really hit home:
(B)y 2050, “seasoned citizens” are expected to make up over 20% of the population.
If this turns out to be the case, it has tremendous implications for both this industry and our culture. There is a great deal of conjecture, on both sides of the political aisle, about when Medicare will become insolvent, but no one on either side seriously believes that it will last until another 45 years without major changes. As well, a lot of these folks are going to need (or may already be receiving) some form of long term care, to be paid for by, well, whom?
In the insurance industry, when speaking with folks about retirement planning, we often use a leading question: “What if you live too long?” Now on its face, that seems a rather impertinent, if not obnoxious, question. It’s rooted, though, in the old adage that most folks don’t “plan to fail, but fail to plan.” That is, most folks have great intentions, but as we’ve seen in previous posts, those intentions are all too often ignored. So, if we don’t have adequate funds for our golden years and we’re healthy, what about folks who are in the same boat, but are ill?
And it’s not just about nest eggs: current statistics indicate that about 20% of those 50 and older will need some form of long term care. And as our population ages, that number is likely to increase. Medicare and Medicaid take up some of the slack, but not nearly as much as most folks think.
And these concerns carry over to the other study, as well: as we continue to make such wonderful advances in modern medicine, a lot of people that used to die from cardiovascular diseases and cancer are surviving the experiences. That’s a good thing, of course, but it’s not a cheap thing. Tests, MRI’s, chemo and medications all cost money.
And the cycle renews.
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