Longevity is real… are we innovative enough?
The goals that were previously considered vital to enjoying a comfortable retirement have changed dramatically over the last couple of decades. Looking back, for example, settling the mortgage on the house and other assets, as well as ensuring that our estimated retirement savings was on par, pretty much covered the retirement goals.
Today however, the number of variables that can derail a comfortable retirement have multiplied. Some of these include the United Nations’ predictions that the world population will increase by one billion people over the next 15 years to reach 8.5 billion people by 2030. This adds enormous pressure to the depleting global resources and can have a severe impact on the quality of life with specific reference to the cost of living, going forward.
Alarming trends
Along with this, a definite upward trend has emerged where people are living much longer, on average, compared to a few decades ago. When it comes to perceptions of common factors that influence longevity, for example genetics, the majority of people would probably indicate that these factors are out of their control. However, in the back of everyone’s mind are the concerns of declining health associated with age, and the ability to create a sustainable retirement income over a longer period of time.
In fact, according to the World Health Organisation (WHO), the global population, aged 85 years-and-older, is projected to increase by 351% between 2010 and 2050 and the population aged 65 years-and-older is expected to increase by 188% during the same period. These alarming increases allow for the global number of centenarians to rise ten-fold between 2010 and 2050.
A pocket of excellence
Adding to this is the prevalence of critical illnesses like cancers and other diseases as a result of the aging population and lifestyle choices. Hence, the occurrence of cancer is expected to accelerate vastly over the next few decades. The annual number of new cases is projected to rise globally to 17 million by 2020 and reach a frightening 27 million by 2030.
Although the above mentioned statistics can create a lot of anxiety, there are pockets of excellence that can address these concerns in an innovative manner. This is because innovation is applied in a way that ensures an outcome that expands the reality of retiring comfortably in today’s day and age, in sickness or in health.
Innovative longevity benefits
One insurer in particular achieved this by designing a one-of-a-kind longevity benefit that removes the risk of clients outliving their capital. Should clients survive a qualifying critical illness, this insurer’s longevity benefit enables them to receive additional pay-outs (on top of their critical illness benefit) for the rest of their lives, which means their critical illness cover will simply never run out.
Also, in cases where clients become disabled and unable to work, they can receive up to 50% extra disability pay-outs. Then, at age 80, if clients never claimed before, this insurer pays-out a significant lump sum that can supplement clients’ retirement income in the long-run.
The combination of a rise in life expectancy and the advances in medical technology means longevity is becoming a crucial factor to consider in the financial planning process with clients. This is because living longer does not necessarily mean living healthy, and the burden includes providing for more comfortable years in retirement and for extra medical expenses.
By making regular pay-outs throughout a client’s life after a claim or if there was no claim, this insurer’s innovative longevity benefit can help the client avoid the financial stress of running out of money or becoming dependent on family as he or she gets older.
