Toronto, ON (Apr. 21, 2014) – The Office of the Chief Actuary of Canada (OCA) indicates that life expectancy in Canada has increased yet again, news which continues to be good for any of us who like to have our own expectations. Children born today can expect to live to about 82 years of age; however, on average females will live longer at 83.9 years than males at 79.8 years. For those at age 65 today, on average, they will carry on until about 86 years of age, more specifically women to 87.0 and men to 84.2.
In the first half of the previous century, most of the gains in life expectancy were for the young. Infant mortality dropped dramatically and the advancement of drugs to treat and vaccinations to prevent disease allowed youth and young adults to survive many of the previous causes of death.
In more recent years the improvements in health care have had a much larger impact on the life expectancy of those over age 65. For example, treatment and prevention of diseases of the heart have decreased loss of life (heart disease has now been replaced by malignancies as the leading cause of death). That trend continues with this latest study, which shows an increase of 2 years in life expectancy over the last decade for those at age 65, an increase twice as large as the increase for any decade since 1929.
What does this mean for life insurance? Generally with longer life, deaths at any particular age have dropped a bit more. The cost for a particular amount of insurance would presumably be lower. Offsetting this of course is the ultra-low interest rate environment we have been experiencing since 2008, as the insurance premiums you have paid to the life insurer and that they have invested are growing more slowly.
The fact that you will probably live a little longer than you would have if you had been born decades earlier doesn’t change the need for life insurance. That need stems more from the financial needs of those — mostly dependents — who would be left behind in the event of your demise, or on your preference to protect your assets in the same eventuality.
The brief announcement of the highlights leads to the more detailed report. The numbers in the report suggest that it was published every decade until the 1950s and then every five years until more recently. Perhaps as the realization that the demographic shift to an older population has significant impact on government social expenses — pensions, health care etc. — the requirement for more frequent assessments grew with seven reports in the last eighteen years.
The Office of the Chief Actuary of Canada is within the Office of the Superintendent of Financial Institutions (OSFI) but operates independently of it.
