| Do you know longevity index? | |
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| Mar 28, 2008 04:20 |   |
 | Source: FT. According to FT, Deutsche Borse has gathered first hand data from the undertaker to find out when people will die. Analyzing the data and official mortality statistics, they work out new Xpect data and index package to help insurers and pension funds calculate their longevity and mortality risks. For pension scheme, it is a big risk if they don't know people's life span because they have to pay pensions to their members in the rest of their lives. At present, this kind of longevity index can help to control the risk. "Last year, JP Morgan launched the LifeMetrics an index that provides annual data for England and Wales. Credit Suisse also made an American longevity index in 2006. Last month, a UK insurance company Lucida announced the first longevity swap transaction based on the LifeMetrics index, agreeing to pay JPMorgan an income stream based on current longevity expectations in return for JPMorgan's promise to pay an income stream based on how long people actually live for." However, the commentators coment that it is an emerging market but very underdeveloped. As an investor, will you invest in this emerging market? What do you think of these longevity indices? |
| Mar 28, 2008 13:29 | #1 |
| For us poor people, term life is just for security for the daily expense for the independant and keeping the lifestyle (avoid hardship) in case of untimly or premature death, from which insurance co. most probably has income stream. For those rich guys/gals, they have whole life, term to 100 or universal life involved with savings and investment in the form of seg funds (70% around pricipal garanteened), those perm insurance less bet on longevity. insurance has to keep reserves for the later death benefit payout for those perm life. |
| Mar 28, 2008 14:09 | #2 |
| I would guess that insurance companies would(could) show profits from "whole life" insurance and not as much profit from pensions "annuity" as the longevity of Asians(China and Japan?), providing they stay away from fast foods, are better than average compared to other countries. |
| Mar 29, 2008 21:27 | #3 |
| government run social security pensions invested in security with low risk and high liquid for the sake of coming retirement of baby-boomers and it sucks to the tight reserves and pension premium revenue from younger generation feed, I am afraid, cannot catch up with payout to baby boomers. It’s a typical phenomenon in aging country. US has no such problem, I guess since it has less social security. BTW, what’s the normal retirement age when US people can earn full amount of social security pension. I think it must be > golden 55, for those who are rich enough to retire at 55, I believe they have bunch of non-registered pension investment that guarantee lux lifestyle during retirement. As Paul stated in other thread, they retire at 58 in Aus. Hmm, so sad thinking that I will have to be labored with heavy load on my bent back during my later ages with white hair and wrinkly face…So it’s better learning to run small business to avoid being slaved when getting older and older…sigh. |
| Mar 29, 2008 23:28 | #4 |
| Can receive full Social Security payment at age 65, early SS payment can be drawn at age 62and 1/2 at 80% of age 65 estimates. (Note) the age(s) have been increased slightly from these figures. The average age 65 monthly SS payment is appx. $980/mo. |
| Apr 6, 2008 21:52 | #5 |
| "I would guess that insurance companies would(could) show profits from "whole life" insurance and not as much profit from pensions "annuity" as the longevity of Asians(China and Japan?), providing they stay away from fast foods, are better than average compared to other countries." Gary, the news says that British people live longer than others in the world. To make "whole life" insurance, perhaps you should invest in Britain. |
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