Quote:
Originally Posted by David Sklansky
Its a boring long term investment. But would it not be true that companies that aren't too involved in annuities or pensions where they want you to die, are going to benefit from the almost certain fact that life expectancy is apt to go way up while premiums will not lower proportionally as they are based on past results. And might that be even more true for companies in less developed countries?
There's a few factors at play.
1. The people who are likely to live the longest aren't the ones buying life insurance.
2. Life insurance is sold cheaply with the assumption that many people will cancel their policy. So there's a burgeoning market in buying people's insurance policies and making their payments for them. It's the life settlement or viatical industry. Sick poor people now have someone to pay their life insurance bills for them, and in fact they have someone who will give them immediate cash to spend before they die.
3. The death rate of the 30 year man who buys life insurance for 20 years to cover his family while his kids are in school isn't likely to change much.
Most insurance policies aren't in force for decades and have been canceled long before people are 65+.