Life Expectancy

Categories: Insurance, Metrics

See: Actuarial Tables.

Yes, we used to die younger. When Social Security was enacted, the average white male in America retired at 65, then died just 2 1/2 years later, saving the nation trillions in Social Security payments. Ahhh, the joys of smoking.

But now we're a nation of health nuts. We don't smoke. We wear our seatbelts. We don't drink and drive. We don't eat meat 27 times a week.

So today, a white male is expected to live about 83 years, females a year or two longer. And really, other than taxpayers, who cares?

Insurance companies do. They provide life insurance to the many. And they've made a fortune in getting people to live longer.

Why? Well, if you have a basic, simple life insurance policy, you pay some amount of term life insurance each month. For a million dollar policy, in your 20s (because odds of dying any given month are low), you'll pay maybe 50 or 60 bucks a month. In your 50s, maybe 300 bucks a month. In your 70s, maybe a grand or more. But every month you don't die, the insurance company keeps all your money. Getting you to live longer so that you will have wasted those payments is just awesome for them.

And yeah, yeah, we know it's way more complicated on the front lines in any given policy. Some go up in payout as you get past 75 and keep paying; others are whole life policies which are a quasi-investment-ish things. Still others are hybrids.

But life expectancy is a Thing; people care. Taxpayers. And insurance companies. And morticians...but that's a different Thing.

Find other enlightening terms in Shmoop Finance Genius Bar(f)