Life Insurance and the Very Elderly

There’s a little secret about life insurance that may blow up in our faces as society ages.  Traditional whole life expires at age 100.  To take an extreme example, suppose that your parents bought you a whole life policy when you were in grade school.  When you turned 18, you took over the payments, and kept it in force.  If you are lucky enough to live to 101, you will get NOTHING from your life insurance, because it expired at age 100.

Not many people know this, and even fewer have cared.  The reason, of course, is that so few people live that long.  But as we know, people are living longer and longer, so this is starting to become a real, though still small, problem.

According to the Census, in 1990, there were about 37,000 people 100 or older.

In November 2008, that figure had grown to about 96,000.

By 2020, there will probably be at least 135,000.

The latest projection I could find as of the date of this writing shows that in 2050, there will be 601,000.

However, some insurance companies are changing their policies to reflect this trend.  One company that I’m aware of now has a few policies that go all the way up to age 115.

Sources:
http://www.census.gov/prod/99pubs/p23-199.pdf
http://www.census.gov/newsroom/releases/pdf/cb09-ff07.pdf

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About lifeandhealthadvisor

I teach people about insurance and how money works, and I help people decide which form of safe money is best for them. I operate primarily in the Pikes Peak region.
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