Sizing Up a Client’s Lifespan

If you’re helping your clients with insurance decisions, the “Commissioners 2001 Standard Ordinary Mortality Table” is a good place to start.

This mortality table is the gold standard for determining how long your clients will live. That information can also aid your investment planning. Introduced by the Society of Actuaries and adopted by the National Association of Insurance Commissioners, this table is used by most states in insurance underwriting and, due to increased longevity, has been extended to age 120.

Based on this table, the average life expectancy of a 65-year-old male, for example, is 82. But it gets a bit more complicated than this.

The Society of Actuaries says that based on the organization’s separate calculations for pension funds in 2013, a 65 year-old male more likely will live to age 88.

Meanwhile, the number of persons reaching age 85 should more than triple to 14 million from 4 million today, according to a study by William Mercer, a Chicago benefits consulting firm. In addition, modal ages for death (the ages at which the largest number of people die) have continued to increase and are now in the late 80s for many groups.

Read more from Wealthmanagement.com here

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