The Change Mariner

Life Expectancy: Now Only Death Is Certain After 100

New York Times:

For nearly 150 years, people who lived past 100 could claim this accomplishment: They had outlived the point at which the life insurance industry technically predicted they would die.

Now the industry is raising the bar, and not just a little. New mortality actuarial tables are being adopted that top off at 120.

The tables predict the likelihood people at different ages will die within a year. It is the first time the tables have been revised since 1980, and just the fourth time since 1858.

This might seem like nothing more than a bookkeeping change, albeit a big one and probably long overdue, but it could lower premiums for people who buy life insurance and help those who live past 100 avoid that other virtual certainty in life...taxes. Life insurance beneficiaries do not owe taxes on the payouts if policyholders die.

But policies that invest part of the premiums, such as "whole life" ones, also have a cash value and when policyholders live to the point where the mortality tables end, insurance companies are required to cash out the policies and return the investment proceeds. Under a 1983 federal law those payouts are taxed.