You’ve likely heard it said that the steady increase in life expectancy over the past several decades is evidence that advancements in medical science have enabled us to extend human life and that it will soon become common for Americans to live to be 125, 135 or even 150 years old.
Well, maybe not so fast.
At the Life Insurance Settlement Association’s 2014 Annual Fall Life Settlement and Compliance Conference, which was held last month in Scottsdale, Ariz., the keynote speaker for the general session was Jay Olshansky, Ph.D., professor at University of Illinois at Chicago’s School of Public Health. Dr. Olshansky reviewed some of his research into estimating the duration of life, which indicates that although advancements in science and medicine are extending the average life expectancy for Americans, it is unlikely to ever create conditions where Americans are routinely able to live 100 years or more.
“In spite of what you may read on magazine covers and newspaper headlines, the truth is that the timing of death in human beings has never really changed,” said Dr. Olshansky. “It’s certainly true that a larger number of people are living longer today than in the past – and that trend will continue – but life span itself is unlikely to change and we’re just not going to see a whole generation of Americans suddenly living to be 120 years old. We have fewer infant deaths than we did in the past, but in return we now have more people dying from cancer, heart disease and dementia in their 80s.”
Having attempted to bust the myth of the 150th birthday, Dr. Olshansky and his academic colleagues have dug deeper into the data regarding life span and have also turned up a startling conclusion with broad social implications: the gap between the life spans of highly educated Americans and their uneducated peers is as much as 15 years.
“There really are two Americas,” said Dr. Olshansky. “The best-educated among us are doing very well financially and living longer, but the least-educated of us are lagging far behind economically and experiencing declines in health that lead to shorter lifetimes. In studying life expectancy tables, even a one-year gap would be large; a 15-year gap is simply monumental.”
Dr. Olshansky’s work is part of a body of research that is allowing academics and actuaries to more precisely model life expectancy among various population groups in the U.S. This new scientific research is extremely important to the life insurance industry as it has profound implications for underwriters who ultimately frame the way that insurers set premiums for each unique policy they issue. It’s also of great importance to the burgeoning life settlement industry as it helps consumers, financial advisors and investors all obtain a more transparent and predictable understanding of which life insurance policies are appropriate for settlement.
All of us in the life settlement market – consumers, advisors, brokers and investors – benefit from more accurate data and a more precise understanding of life expectancy. We should be open to innovative research into human longevity and be willing to challenge our traditional thinking about life expectancy when new data becomes available, even if that research and new data seems out of the box to us at first glance.
And if Dr. Olshansky’s research is correct, the first lesson to be learned is that the birthday cake with 150 candles on top isn’t likely to be making an appearance in your kitchen any time soon.