Older consumers are buying more life insurance than they used to, and the life insurance industry needs to know more about the products those older consumers are buying and how the products should be priced.
Consultants at Tillinghast, Stamford, Conn., a unit of Towers Perrin Inc., New York, have presented those conclusions in the Tillinghast Older Age Mortality Study 2, an analysis of mortality experience data collected from 2003 to 2005 for older-age insureds at 29 life insurers.
The new study, TOAMS 2, follows up on an older-age mortality experience study that Tillinghast released in 2005.
Between 2000 and 2005, participating insurers’ exposure to mortality risk for insureds ages 75 and older increased significantly, and policies with issue ages over 70 account for 30% of UL sales premium volume at some insurers, according to Mike Taht, a Tillinghast principal.
The Tillinghast findings in TOAMS 2 agree with data from MIB Group Inc., Braintree, Mass., which suggest that life sales to consumers ages 60 and older increased 4.3% between 2006 and 2007, while sales to consumers ages 45 to 59 declined, Taht says.
Other Tillinghast study findings:
- Actual experience was better than predicted by the 2001 Valuation Basic Table. Older-age mortality experience for participating insurers fell to 74% of the 2001 VBT in TOAMS 2, from 78% of the 2001 VBT in the original TOAMS.