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The 5 States Where Death Is Most Unfair

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(Related: What If Annuity Holders’ Life Expectancy Spikes?)

The federal Centers for Disease Control and Prevention (CDC) has just published a batch of data that will keep annuity actuaries busy for months: estimates of life expectancy for U.S. census tracts.

Analysts at the CDC’s National Center for Health Statistics based the report on data collected from 2010 through 2015. The report includes data from the District of Columbia, and from all states except for Maine and Wisconsin.

Mean life expectancy at birth, or LEB, in the jurisdictions included ranged from 75.4 years in Alabama up to 81.4 years in Hawaii, with a median of 78.7 years.

In the new report, the analysts break the data down another way: by census tract.

A typical U.S. census tract is home to 1,000 to 8,000 people. In a big city, a census tract may be about the size of a typical neighborhood.

All other things being equal, life insurers might prefer to see agents sell more life insurance policies in the high-LEB census tracts, and more annuities in the low-LEB census tracts.

One problem is that many of the people in the low-LEB census tracts might be too poor to be good annuity prospects.

At the census-tract level, LEB ranges from 56.3 years, in a tract in Oklahoma, up to a high of 97.5 years, in a tract in North Carolina.

We looked at state-level life expectancy inequality, by finding the gap between the LEB for census tracts with the lowest and highest LEBs.

The “LEB gap” ranged from a low of 17.9 years, in Delaware, up to a high of 34.6 years, in one state.

For the five states with the highest LEB gaps, see the data cards above.

— Read Reinsurers Have Traded $60 Billion in Longevity Risk: Rating Agencyon ThinkAdvisor.

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