February 1, 2020
Life expectancy trends have been changing over the last several years as the impact of the pandemic added a new element to the mix. BuzzFeed News reports that data from the National Center for Health Statistics shows an increase in life expectancy to age 78.7 last year, the first increase in US life expectancy since 2014.
Federal health officials believe the increase in life expectancy is a result of lower heart disease and cancer death rates, and a 4% decrease in drug overdose deaths. The latter is notable as it was the first time drug overdose deaths decreased in 28 years. Healthy life choices are leading to a longer life.
The increase in life expectancy reversed the trend seen over the previous years where life expectancy was decreasing. The decreases were being driven by many lifestyle driven reasons and accidental deaths.
Changes in Life Expectancy
The Centers for Disease Control and Prevention (CDC) list the primary impacts to changes in life span, including large increases in cardiovascular disease and decreases in Covid-19 due to the uptake of vaccines and lower incidence of kidney disease. The CDC analysis breaks down the determinants by demography, and Hispanics had the highest life expectancy.
According to the World Health Organization (WHO), life expectancy has increased, globally, by more than 6 years between 2000 and 2019 – from 66.8 years in 2000 to 73.4 years in 2019. The WHO data also provides the data sources used to complete its analysis, as well as full life tables, by country. The biggest factor in the increase in the World Health Organizations’ data is the decrease in mortality rates in developing countries.
Impact of Covid on Life Expectancy
In 2020, Covid-19 became one of the leading causes of death in the U.S., surpassing many infectious diseases. A recent New York Times article reviewed the impact that Covid-19 had on life expectancy, as well as the other changes to mortality rates that predated the Covid-19 epidemic. Outside of Covid-19, drug abuse and Alzheimer’s Disease saw the greatest increases in causes of death.
With the increased uptake of vaccines, the impact of Covid-19 on mortality rates started to decrease in 2021 and into 2022. The impact of vaccines being experienced in developed countries is ahead of the trends in developing countries where the availability of vaccines is behind.
U.S. Life Expectancy
The U.S. ranks quite low among developed countries, across all demographics, in average life expectancy. The disparities relate to many different items, including public health approaches, health care systems, rates of obesity, and other metrics. Japan (84.91 years) and Hong Kong (85.16) have the highest life expectancy in number of years, compared to the U.S figure of 79.05 years. Many European countries like Belgium and Sweden are in the middle of the pack for average life expectancy.
In the U.S., the differences in mortality rates among different economic classes is much more significant than other developed countries. The surge in “deaths of despair” (suicide, drug overdoses, and alcohol) are working against improvements in other areas, particularly among lower, working class demographics.
Increasing Life Expectancy
Additional root causes to the increasing life expectancy in developing countries include availability of vaccines, better health choices, and better medical care. More aggressive public health interventions have also helped improve population health. Better health outcomes have led to increased world population, but the differential in life expectancy from country to country can be significant.
The biggest impact has been on older ages, as age-specific mortality tables show. Data from the National Center for Health Statistics (NCHS) estimates that the increases in life expectancy are expected to continue. The old age mortality data also shows continued expected improvements. Life expectancy increases have been seen in all countries around the world.
Some may perceive that the global increases in life expectancy are related to the decreases in infant mortality. However, the data shows that this is not the case. The mortality improvements across the globe are more related to improved public health policies and responses to and containment of infectious diseases. Further, the data shows that there have been decreasing death rates at all ages.
Current Life Expectancy Trends
The National Center for Health Statistics, National Vital Statistics System, recently reported the 2020 “Provisional expectations of life, by age, race, and sex.” The report concluded that overall life expectancy dropped in the U.S. in recent years by about 1.5 years, with the major negative impact resulting in the decrease being attributed to COVID-19. The report has many details about the impacts, positive and negative, on life expectancy by gender and race and for various age groups.
Here are some other important statistics relevant to the senior and retirement market. As outlined in the CDC’s table in the article referred to above, the average life expectancy in the U.S. (regardless of gender) at age 70 is 15.3 years; age 75 is 12.0 years; age 80 is 9.1 years; and age 85 is 6.7 years. Additional data is available in the report from the United Nations.
PNAS and DOI produced a report titled, Dynamics of Life Expectancy and Life Span Equality, that explores the scientific nature of the increases in life span and life expectancy. It is important to understand, as these changes and trends can have an impact on the value of your own life insurance policy.
Impact of Longer Lives
As medical treatments and technologies improve, and Americans begin living longer, a survey from Natixis Investment Managers found that an alarming number of Americans are under-funding their retirement savings. Their research showed that 27% of American workers have borrowed against their retirement plan, and another 27% have taken early withdrawals.
The reasons given for not saving more for retirement ranged from daily living costs, credit card debt, housing costs, and health care costs. Unfortunately, new data from TD Ameritrade shows that 28% of Americans aged 60 and older have less than $50,000 saved for retirement, and another 13% have $50,000-$99,000 saved.
Given these two trends, increased longevity as well as a trend toward underfunding retirement savings, more U.S. seniors are struggling with ways to maintain their lifestyle over longer than expected retirements. An option that is available that many people do not know is called a life settlement.
What is a Life Settlement?
A life settlement is when a life insurance policy holder sells a policy to an unrelated third-party for a lump sum cash payment. Life settlements allow a life insurance policy holder who no longer needs or wants their life insurance coverage to sell their policy to a buyer for some amount of the death benefit.
Life settlement transactions have helped many seniors in their retirement years by getting rid of a costly, and often ever-increasing, premium payment in exchange for a sizable lump sum cash payment that can be added to their retirement fund. When you sell your life insurance policy in a life settlement, you are no longer responsible for making premium payments.
Life settlements are regulated transactions at the state level (like all insurance products). Having regulations in place ensures that your policy sale is completed with a company approved by state regulators, using closing documents that have also been reviewed and approved by regulators.
What is the Value of My Life Insurance Policy?
A life settlement allows life insurance owners to realize the market value of their life insurance policy. In a life settlement transaction, the policyholder receives a lump sum cash payment of an amount less than the policy face value, but more than the cash surrender value. The new owner then pays all future premium payments on the policy.
A person’s life expectancy is a major factor in life insurance – it will determine whether you are eligible to purchase a new policy and what your policy’s value is should you choose to sell your policy. You will provide permission to the life settlement company to review your medical conditions and well-being to value your policy.
You can get an instant estimate of the value of your life insurance policy by visiting our Life Settlement calculator.
Bottom Line on Life Expectancy and Life Insurance
The bottom line is that if you have clients that are considering surrendering or lapsing their life insurance policy now, or in the near future, it could be worth more than it might have been in pre-COVID years – an essential consideration as you help your clients evaluate their personal financial situation. If you’re interested in receiving a quick and easy estimate on the potential value of your client’s policy, get an ‘instant’ quote directly from our online calculator page!
For more information, please call 888-388-0988, contact us, schedule an appointment, or email us at email@example.com. Our team is available and ready to work with you on all your life settlement needs.
Remember: Never let a client abandon a life insurance policy without looking at the life settlement option first!