Life expectancy vs longevity… is it the same thing?
Most babies born in 1900 did not live past the age of 50. Today, life expectancy at birth exceeds the age of 81 in several countries, according to the World Health Organisation (WHO).
In South Africa, life expectancy at birth currently stands at 61 years. Then we throw the word longevity into the mix and state that based on re-insurance data, on average, 80%of Momentum’s clients will live beyond the age of 80, taking into account modest improvements in mortality.
The difference between life expectancy and longevity?
According to Wikipedia, life expectancy can be defined statistically as the average number of years remaining for an individual or a group of people at a given age. This increases with age as individuals survive the highest mortality rates associated with childhood.
Longevity on the other hand refers to the characteristics of a relatively long lifespan of some members of a population. In saying this, longevity is no longer a distant, abstract concept; it has become part of our everyday reality. Statistics do however indicate that a healthy lifestyle and persistent improvements in medicine can contribute a great deal to longevity.
With this in mind, it is quite shocking to realise that during 2010, globally, there were an estimated 524 million people who were aged 65 or older. This equates to eight per cent of the world’s population. According to the WHO, by 2050 this number is expected to triple to about 1.5 billion, representing 16% of the world’s population.
When one further considers the fact that life expectancy and longevity are not mutually exclusive - meaning that as life expectancy increases globally, so does longevity - one can’t help but reach the frightening conclusion that living longer does not necessarily mean living healthy which further implies that longevity has thus become a risk which must be taken into account by insurers.
Foward planning
The effects of medical advances have far reaching effects for the insurance industry from the way new products will be structured, specifically around the ageing population, and the way clients are underwritten.
For instance, there are currently genetic tests that can determine a person’s risk for developing breast cancer long before any breast cancer cells develop in the body.
People who test positive for these genes have between 45% to 90% chance of developing breast cancer in their lifetimes. In addition, a new smart application can analise skin lesions/moles by scanning them on a smart phone and determine whether they are potentially cancerous.
These types of tests will eventually be available for many other diseases and this might have an impact on underwriting practices in the future.
The industry has also seen a definite shift from mortality to morbidity. With ageing, comes the increased risk of diseases like diabetes, cardiovascular diseases cancer and Alzheimer’s. Due to amazing progress in medicine, people are living longer with these diseases/disabilities and might require long-term care. The industry will need to develop more products to specifically deal with frail care needs and also extend the terms of these products.
Living two lifetimes
Looking at the mentioned statistics regarding longevity, it almost seems as if we are nowadays living two lifetimes consecutively. In fact, some of us might already be living our second lifetime.
This is why is has become so important to consider longevity when we plan for our futures. Living longer and being able to make more memories is a great thing but to afford a longer and healthy lifestyle does come at a considerable cost.
