COVID-19 has had a dramatic impact on life expectancies in the United States, according to Atlanta-based LifeGuide Partners. It says that, in 2020, the average American’s life expectancy plunged by 12 months – a full year.
“How much that will continue to change is unclear, as the virus that causes the disease continues to wreak havoc into this calendar year, with variants and the possibility of resurgence still afoot,” says Wm. Scott Page, the CEO of LifeGuide Partners, an Atlanta-based national educational resource for seniors and others searching for additional ways to fund retirement. “Add to that the fact that we still don’t fully understand the long-term effects of the coronavirus, especially as it pertains to COVID-19 long-haulers.”
Actuarial tables – statistical tables that predict the probability of someone reaching a certain age – tend to be revised slowly. Still, the economic and social trickle-down of shorter life expectancies will continue to be felt and is already showing up through increases in life settlement payouts, Page says.
Life settlements enable seniors – and others with serious illness, such as ALS (Lou Gehrig’s Disease) and some cancers (stages 3 and 4) – to receive an advance cash payment for their life insurance policy. Such settlements typically generate more value for consumers than cash value and more than the insurer will offer.
Page adds that many factors, including life expectancy, determine the appraisal value of a life insurance policy and any resulting life settlement payout. Other elements include a policy’s death benefit, premium costs and cash value. Still, life expectancy is a critical part of this calculation, so a major impact in this area is, well, major for life settlements.
“I anticipate this trend will continue to have a dramatic impact on the life settlement market – short- and long-term,” Page says. “With the American lifespan dropping 12 months, and maybe eventually more, life expectancy calculations will change and definitely affect how policies will appraise and, therefore, how much settlement amounts will be. Offers should go up.”
Page, the author of It’s Never Too Late: Getting Older, Wiser, and Worry Free in Our Golden Years, cites sources as varied as the National Academy of Sciences, the CDC and former New York City Health Commissioner Dr. Mary T. Bassett.
“I’ve been hearing from savvy insurance agents and financial advisors – in addition to educated consumers – who have clients for whom a life settlement may be an appropriate solution,” Page says. “We’ve been encouraging them to immediately get those life policies appraised. We’re also already recalculating outstanding offers with this data in mind. Some agents and advisors are surprised, but even a small change in life expectancy can have a significant impact on the value of a policy.”
Page is an expert on retirement and financial issues facing seniors, Boomers and the Silent Generation. He has appeared on 20/20, NBC Nightly News and Fox, and been featured in The New York Times, The Wall Street Journal and Newsweek. He wrote regularly for Huffington Post and Forbes on money matters.
Page may be most familiar as the guy who recruited Betty White to serve as a spokeswoman for the life insurance settlement industry. He now focuses exclusively on helping seniors take advantage of new financial opportunities that have become available in recent years.
For more information visit www.LifeGuidePartners.com.