Knowing why would be nice.
I saw this discussion on Tucker Carlson. It is troubling to be sure, but how troubling? Death rates between 18 and 65 are up 40%
The insurance industry knows more about length of life than anyone else. Because they must. If they are wrong and set premiums too low they end up going broke. A 40% increase on mortality experience is ominous to say the least. The question we must answer before we rush out to buy life insurance policies and sell short the stock in the weak companies, is this – What does a 40% increase mean exactly?
We agree it is not good but it doesn’t mean 40% of the people will pass away this year. The problem is when you have a large percentage increase people reach wrong conclusions as often as not. It is especially problematic when the large increase applies to a small rate of occurrence. Fort example if the probability of dying from some cause is one in ten million, would you be terrified it the rate increased 100%. Maybe but that means the probability is now one in 5 million. Less terrifying. The problem with mortality rates is most of them are not exactly tiny.
The insurance industry will be working on what it means. It may not affect you as much as you think.
First of all these numbers are from STATSCAN not an insurance company. They relate to the entire population, both male and female and smokers and non-smokers and impaired lives and healthy lives. Insurance companies use the death rate among healthy non-smokers to set premium and it would be much less.
You can see the numbers from STATSCAN here.
The number of people in each group is not disclosed and it matters. Lets’ assume for the age group America One is talking about, 18-65, it is 2 per 1,000. say a 47-year-old. A 40% increase would run it up to 2.8 deaths per thousand lives. Another way to see it is 28 deaths per 10-thousand up from 20. If an extra 8 lives per 10,000 of population are dying, we should be concerned enough to find out why and address the causes.
At this point we have correlation with Covid but no more. There is causal link yet and I suspect we will find out there are dozens of reasons.
Adding one more bit. OneAmerica is a large provider of group insurance. Their insured life base is different from an insurer that sells primarily individual life policies. Individual policies are more thoroughly underwritten and I would expect the results to be different. If you are a male smoker, with a bad driving record, a poor family health history, and occasional hard drug use, you won’t be in their statistics at all. You could be in a group case.
Probably not. Group insurance can be repriced so if the mortality rate is increasing, the premiums will go up to compensate. If you are an employer, you should expect an increase on the price of this component. It’s a tiny share of the entire bill so you might not notice. Bank offered life insurance will likely increase too.
Individual term policies may rise, but so far I have not heard of any of the large companies planning such an increase. It’s possible.
Arrange individual coverage that meets your needs. You should anyway. Group insurance, and especially bank loan coverage are defective for many reasons, not the least of which are price and control of the coverage.
Individual coverages tend to be more customized to your needs and wants, and are often materially cheaper than group or association coverages.
Take control of the things you must have. Like insurance.
Excess deaths are as yet unexplained and complex situations seldom have unique causes.
Your insurer is unlikely to be seriously affected.
You should get after controlling your own insurance portfolio.
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