One of the most interesting things about turtles is that once they reach adulthood, their organs don’t break down the way they do in other animals. As a result, turtles don’t die of old age. Predators or disease finishes them off, but under ideal conditions, turtles are darn near immortal, as evidenced by the passing of Adaitwa, a tortoise in a Calcutta zoo who died in 2006 at the estimated age of 250.
If only we were as resilient. Human longevity is reaching unprecedented lengths, with more people living to 100 than ever before. According to recent Census statistics, the U.S. has the world’s largest centenarian population, but that’s only half the story. In 1990, the Census counted 37,000 centenarians in the country. By 2010, the count had grown to an estimated 114,000. It is expected to nearly double to 214,000 by 2020 and to nearly double again, to 447,000, by 2040. The U.S. has the world’s largest centenarian population, but the curious thing is that most folks who live to 100 and beyond typically have been super healthy their whole lives, never having major illness, surgery or dementia. While our healthcare system does play a huge part in extending our overall life expectancy, and while a huge portion of healthcare costs go toward treating the chronic ailments that afflict older patients, the really long-lived don’t seem to need it. It would seem that living to 100 and beyond is at least partly a matter of genetics, but the ballooning numbers of the long-lived do suggest that environmental conditions such as improved nutrition, access to preventative care and overall quality of life—all staples of Western life—have huge roles to play.
The bottom line, however, is that more of us are we are living longer and that is having a massive cumulative effect on our society, as you all well know. A recent story in the New York Times discussed the science of getting older, and more specifically, what it takes to be healthy at age 100. One of the interesting concepts of the article was the how we have a physiological reserve—a set amount of vitality in our bodily functions that breaks down with use over time. For a lot of bodily functions, that breakdown happens even when we are young, but we don’t really feel the effects of it until we get older, which is why the ill effects of age have a way of sneaking up on us. One day, we feel fine. The next day, we feel like Father Time just ran us over. While this lays out a pretty clear case for combining adequate long-term care resources with retirement planning, it also might explain why the American Academy of Actuaries recently suggested that the mandatory retirement age be increased to somewhere north of 65. Given the drubbing so many Boomers have taken on their retirement portfolios recently, retiring after 65 is a given. But even is retirement stays at 65, the increasing longevity of life, health and financial planning clients provides a lot of interesting opportunities for the life/health industry.
It is already having a profound impact on the life settlement industry, which has been struggling to contend with the challenge of lifespans changing faster than anyone expected. The Society of Actuaries has taken notice too, and has published an in-depth look at the underwriting challenges of longevity itself, particularly to how it impacts the annuities market. And the risk that underestimating longevity poses to pension plans and other forms of retirement planning is nothing short of severe.
With depressing numbers for life insurance sales still fresh in our collective memory, and with the cost of healthcare a foremost concern for the industry, the reality of longer lives and the unique challenges that brings also provides the life/health industry with some of the most interesting opportunities it has faced in some time. I have yet to speak to a life agent who does not earnestly believe in the value of life insurance. Or long-term care coverage, despite its cost. Or sound retirement planning. Blending these products is a topic of much conversation, especially in National Underwriter’s various sister publications. This industry has experienced more than its fair share of deep shocks in recent history, with market turbulence, financial services overhaul and healthcare reform basically rewriting the rules of the game. A lot of industry veterans have expressed to me a sort of quiet despair that things might be changing so fast that the markets as we know will simply break under the strain. Maybe so. (But God, I hope not). But maybe, but if this industry has been about one thing, it has always been about the long game. And the inexorable lengthening of our own lives might yet be the one opportunity that will provide life/health’s best and brightest from finding new opportunities and making new prosperity from them.