Life Insurance costs could fall as babies live 30 years longer
According to research from Partnership, a firm who specialise in enhanced annuities the average baby born in 2012, the year of the London Olympics will live 30 years longer than babies born in 1908, or 1948, the last time the Olympics were held in the UK.
The research showed that the average women born in 1908 lived to 54, whilst the average man only lived to 50. By the time babies born in 1948 reached the end of their life, they could have expected to have lived to 66. Babies born now can expect to live until they are 78 for men, or 82 if they are female, a huge difference.
With people living longer, the average cost of insurances like life insurance will fall, especially when it comes to term life insurance. With more and more people outliving their policies, and less and less claims being made, the cost of the insurance policies will fall.
The number of people living to receive a letter from the queen on their 100th birthday has also increased. In 1908 there were just 100 people aged over 100. In 2012 it is expected that just over 800,000 babies will be born, and 35% of those will live to be 100, giving the queen a lot of letters to write.
The problems for pension companies are obvious however, with 12million people living long enough to claim a state pension, and the average length of time drawing on the state pension is now 24 years.
It’s estimated that the extra life expectancy will cost the government an extra £80billion by 2050 with many living longer and longer.
The Olympics is just around the corner and so are price rises to life insurance policies caused by the EU gender directive, and the budget closure of the tax loophole currently used by life insurance companies to offset the profits they make on investments against the cost of their life insurance businesses.
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