Wednesday, August 10, 2005

Life’s a Beach...

When I first started in this business, lo those many years ago, the industry relied on something called the Commissioners 1958 Standard Ordinary Mortality Table, or 1958 CSO for short. The CSO was a means by which insurance companies (and litigants in wrongful death suits) could determine the likely lifespan of an “average” individual. Insurers relied on it (as well as other factors) in setting their rates for various life insurance products.
As time went on, and our lifespans increased (Yay, modern medicine!), there arose a need to update these tables and, in 1980, the NAIC (National Association of Insurance Commissioners) approved a new version, which showed significant increases in how long the average American could expect to live.
Every so often, these tables are revisited and revised, and we get an interesting snapshot of our own mortality. For example, one who turned 65 at the turn of the previous century had a much shorter expected lifespan than someone who turned 65 just 3 years ago – almost 7 years shorter!
The most recent table paints an interesting picture of America today (or at least late 2004): we’re living longer than ever before, for example, with about 12% of our population now over age 65. That number, by the way is growing: by 2050, “seasoned citizens” are expected to make up over 20% of the population. This would appear to be quite a challenge as we try to decide what to do with Social Security and Medicare.
In a somewhat related study, Tillinghast (a business which studies these things, so we don’t have to) recently published an Older Age Mortality Study which tracked causes of death among folks with life insurance. That study found that in general, cardio-vascular disease is the number one killer, but cancer killed more (insured) folks ages 50 to 69.
There are some interesting industry and social implications that arise from both of these surveys, and we’ll discuss those next time.
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