But now I’m confused.

A recent Canadian study (reported here) concluded that people who are overweight live longer than people who are classified as “normal” weight. Not only that, but people who are classified as ‘significantly’ overweight also live longer.

The study of nearly 12,000 people, led by Statistics Canada’s Heather Orpana, was devised to estimate the relationship between body mass index and mortality in Canadian adults.

Results…

• Being overweight was associated with a 25-per-cent lower risk of dying
• Being obese was associated with a 12-per-cent lower risk of dying.
• The risk of dying for a morbidly obese person was statistically the same as the risk for people of “normal” weight.
• Underweight men are at greater risk than any other weight group.

Was this a once-off study with flawed results? It appears not.

In 2005, research undertaken by the US Center for Disease Control and Prevention published a study with similar findings. (At the time prominent health experts were outraged.)

So, if this research is indeed true, what does this mean for life insurance?

The simple answer is that overweight people would get cheaper life insurance premiums.

Imagine that.

The X Prize Foundation is offering US$10M to the first team to sequence the genomes of 100 centenarians.  In layman’s terms “find the genetic code for those that live beyond 100 years”.  The competition starts Jan 2013, and the sequencing has to take place in 30 days.  The competition aim is two-fold. First, find a way in which genomes can be sequenced accurately in a relative short period of time, second, determine what genetic pool is consistent with longevity. No easy task apparently (read the article in the economist for more info).

Back to the black shirt underwriters. The ability to sequence genomes quickly will make the cost of getting a report on an individual’s DNA make-up much more affordable. A hair sample will give an underwriter an accurate description of the likelihood of all or any serious alignments that may linger, and a much better view of longevity. No more blood or urine tests; simply send a hair sample and with-in minutes the underwriter will have a health assessment waiting on their PC with the aid of some ingenious piece of software. The push to economise genome sequencing is going to revolutionise the underwriting world, and my pick is it is going to happen a lot quicker than underwriters are prepared for.  Resistance to change will fall by the wayside when their masters learn of the cost savings to be made, and the improved outcomes these new techniques will deliver, particularly when underwriting for critical Illness and disability products.

The tag-line of the future?……  Life insurance premiums as unique as your DNA

People buy life insurance, why? So that if they die unexpectedly, they’ll leave loved ones a bucket of money to keep them going. It’s simple really.

But what if the insured person doesn’t die unexpectedly?

It seems that sometimes ‘loved ones’ are capable of providing a little help.

Here’s a story from South Carolina, US, where a woman was charged with murdering her ex-husband, her stepmother and her two sons no less – all for the life insurance money.

Is there a moral in this? Not sure. But if you’re looking to take out a life insurance policy, at least make sure your beneficiaries are truly your loved ones.

Q

I would love to buy life insurance but I have one concern. If insurers cover you until you are 100 years old, there’s a 100% chance the insurance company will have to pay you the amount you are covered for.

I have put together a spreadsheet with a $30/month payment and interest at 8% pa. I could not save even $250,000 in 50 years, whereas if I die, the insurance company would have to pay out $420,000 – the amount I covered myself for.

What am I missing here?  How come the insurance companies don’t go broke?

Thanks, Roxanne.

A

Thanks for this Roxanne.

There are a few things that you haven’t factored into your spreadsheet.

Firstly, a life insurance policy that covers you until you are 100 years old would have a monthly premium that increases each year.  This annual price increase takes into account the fact that your risk of dying increases each year, as you age. In the first year you may be paying $30/month but after say 20 years you would be paying something like $200/month. So you’ll need to factor this annual increase into your spreadsheet numbers.

Secondly, a large proportion of people taking out life insurance cancel their policy long before they die.  Life insurance is like car insurance in some ways… you only need car insurance while you have a car. Once you sell your car, you can stop paying the insurance and cancel your policy.

Most people don’t continue with their policy past age 75. Besides the fact that it gets very expensive, the purpose of life insurance is to financially protect those people that are dependent on you. By the time you are 60 or 70, most people don’t have financial dependants – their children generally have their own income. So they no longer need the insurance and they stop paying.

That’s insurance for you… collecting premiums from the many, only to end up paying the few.

Great business:-)

Who can we blame for this initiative?

Look no further than the Movember Foundation – a global not-for-profit, charitable organisation which runs this Movember celebration of men’s health.

For the record, the idea for Movember came about in 2003 when a few mates having a beer in a Melbourne pub recognised that men were lacking a way to adequately promote men’s health and came up with the idea to bring the moustache back for one month, and in doing so, have some fun, raise money and hopefully encourage men to talk about their health.

So why are we talking about Movember on a life insurance blog???

Because we in the life insurance business are impacted by the very health issues highlighted by this initiative – particularly prostate cancer.

Did you know?…

• Prostate cancer is the most common cause of cancer-related death in men (3.8%) behind lung cancer (6.1%) and bowel cancer (4%)
• In NZ, around 2000 to 3000 men are diagnosed with prostate cancer each year.
• There are generally no early warning symptoms for prostate cancer
• All men over the age of 50 are at risk of prostate cancer and should be tested annually
• If you have a history of prostate cancer in your family you should have tests from age 40
• Prostate cancer is curable if detected and treated early
• Men are not bullet proof. (Yep, it’s true… men get cancer too)
• You can get a Cancer Cover policy online that pays you a lump sum up to $250,000 if you’re diagnosed with cancer.

Read our previous blog on this topic.

The problem with the Rapture is that we don’t know who exactly will get the highly desirable heavenly call-up and who’ll be discarded to face hell on earth. If you’re the family breadwinner and you’re raptured away, will your family have the financial resources to continue living their devilish lifestyle without you?

Have no fear… that’s where ‘Rapture Insurance’ comes in.

Rapture Insurance (read ‘Life Insurance’) is hellishly simple. You get raptured and the insurance company pays a cash lump sum to your surviving, earthbound family.

Better still, you can buy this insurance online, all done in just 10 minutes.

With just hours to go, there’s no time to waste. Get insured now… click here!

Yes?

Then (in a perfect world obviously) you should be entitled to a 14% discount on your life insurance premiums!!

A research study briefing in Time Magazine says that just 15 minutes of exercise each day increased your life expectancy by 3 years and reduced your risk of dying by 14%.

Research was conducted on 400,000 Taiwanese people over a period of 3 years, and the study compared people who undertook on average 15 minutes of exercise per day with people who were inactive.

Whilst we’ve known for a long time that exercise is good for your health, the specific relationship between ‘minutes of exercise’ and ‘years of longevity’ has not been that well researched.

With this type of information now emerging, I would not be surprised if in years to come life insurance companies start asking about your exercise habits before either quoting a price or issuing you a policy.

Watch this space.

Let’s start with the car keys, that silver and brass jingle in your pocket (or so you thought), essential to getting back home in time to watch the replay. Statistics show, that your keys are the most likely item to be lost at a major sporting event. After a major sporting event, a stadium will receive on average 70 calls for lost keys. It may well be the levels of intoxication that predicate these lost keys. A study conducted by the University of Minnesota determined that one in every 12 fans leaves a major sporting event intoxicated.

It turns out that all types of motorists — not just pizza delivery drivers — are at risk on the roads after a major sports event. A study published by the New England Journal of Medicine tracked driving deaths on 27 consecutive Super Bowl Sundays discovered a 41% jump in the number of fatalities in the hours after the game than in the same time period on all other Sundays.

The study also reported that the number of crashes in the state of the losing team rose 68% after the game, compared with an increase of just 6% in the winner’s state.

So let’s keep the road fatalities down to an absolute minimum. …. Go The All Blacks!

…and click here to see what you’d pay for life insurance…

Some facts:

• All women have a chance of developing breast cancer in their lifetimes.
• Around 2,400 women are diagnosed with breast cancer each year
• As women grow older, the risk of being diagnosed with breast cancer increases…

• The rate of breast cancer diagnosis is increasing in NZ… an 18% increase in the ten-year period 1995 and 2004…
• However, the death rate from breast cancer is falling slightly… due (in part) to the efforts of making women more aware of the need for regular screening… which is exactly why we’re talking about it on our blog!
• Still, more than 600 women are likely to die this year from breast cancer… that’s 12 women per week! So no reason to be complacent.

In NZ many women tend not to have regular screening mammograms…. this means if there is breast cancer, it’s often well established by the time their doctor examines them and these women are more at risk of dying from breast cancer… obviously.

Finally, Pinnacle Life recently launched an insurance product called Cancer Cover.

The product pays out a lump sum up to $250,000 if you’re diagnosed with cancer… cash you can use to supplement your income, pay medical bills or simply take some time out.

For each Cancer Cover policy purchased online, Pinnacle Life will make a donation to The New Zealand Breast Cancer Foundation (NZBCF).

To get a quote for Cancer Cover, click here…

You can read all about it here and here.  And to help you cut to the chase quickly, here are the two conclusions…

Study 1: Sitting and watching TV shortens your life by 22 minutes for every hour you spend glued to the screen.  This means people who watch TV on average 3 hours a day are likely to shorten their life expectancy by 2 to 3 years.

Study 2: People who sit more than 10 hours per day have a 48% higher risk of dying than people who sit for less than 4 hours per day. Since most people with desk jobs (like me) already sit around 6 to 8 hours per day at the office, that doesn’t leave much for driving and relaxing at home without taking your life into your hands.

OK.  So sitting is not only bad for you, it also appears to be a good predictor of how long you’ll live…. Which brings us to life insurance, which is what this blog’s about… remember?

You see, if we know that sitting is one of the factors that influences how long you’ll live, then surely this should also influence what you pay for life insurance. If you’re deemed to be a big-time sitter, you’re headed for an early grave and you should be charged more for your life insurance. Conversely, if you spend most of your time on your feet (eg a builder) then you should be charged less for your life insurance.

Here’s an idea

On your life insurance application, you’re typically asked if you participate in dangerous pastimes such as sky diving, base jumping, rock climbing, scuba diving and so on, because these pastimes are likely to reduce your lifespan.

So how about adding another dangerous pastime to this list… like ‘sitting’?