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The Significance of Increasing Life Expectancies to the Insurance Industry

Tuesday, July 15th, 2014

Social Science Research Council’s 2013-2014 American Human Development Report revealed the 15 U.S. states that have longest life expectancies. For sometimes now, Hawaii has taken the led as the state with the longest life expectancy. The state has a life expectancy of 81.3 which is 2.3 years more than the national average of 79 years.

Among all United State territories, Mississippi took the last position with a life expectancy of 75 years at birth, four years below the country’s average expectancy. “Mississippi has life spans and earnings of the typical American in the late 1980s,” says the Social Science Research Council. According to Steven Weisbart, Chief Economist and Senior President at Insurance Information Institute said that increase in life expectancies isn’t new to the life insurance industry.

“Nationally this is not a new idea, within the states there have always been differences,” said Weisbart. “All this data does provide an update to previous data that also showed significant differences in life expectancy.”

However, the current increase in life expectancies is a good opportunity for insurance agents to build their customer base. According to Weisbart, insurance premiums have consistently been decreasing over the last few decades. Better medical health and increased life expectancies has been responsible for the continued decrease in premiums. Most United States citizens feel that life insurance is still too expensive.  It is the highest ranked choice to be avoided.  About 66 percent of people cite cost as the reason for not taking cover while 36 percent say that cost is the major reason.

30 percent of all households in the U.S lack a life insurance cover while about 58 million households feel that their current cover is not adequate. Many acknowledge the need to have a cover but they still ignore it.

According to Weisbart, mortality rates are dropping and the premium rates are quite low, agents should seize the opportunity to approach more people to buy insurance covers. “Especially in states where rates are lower than others, this makes a good opportunity to get the conversation going.”

Data on life expectancy is a way to show that life insurance isn’t very expensive since this is one of the factors that make the premiums less expensive.

The Social Science Research Council did an analysis of data from American Community Survey 2010, U.S. Census Bureau, the Population Estimates Program, National Center for Health Statistics and Centers for Disease Control and Prevention to come up with these statistics.

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