The Longevity Gap and Life Insurance Settlements

What You Need to Know

Biology seems to cause some of the difference.
Societal pressure may also play a role.
The gap affects how much investors will pay for in-force policies.

Last year, we learned that the COVID-19 pandemic impacted the longevity tables used by life insurance companies to calculate rates.

However, an even more substantial development has been the widening longevity gap between men and women, which has recently reached its largest difference in 25 years.

This global phenomenon has significant implications for the life insurance industry, particularly regarding life insurance settlements.

In the United States, the average life expectancy for women is 79.1 years, while for men, it is 73.2 years, representing a nearly six-year difference.

This increasing gap has substantial implications for the financial planning industry.

With the gap between men’s and women’s life expectancy increasing, understanding the reasons behind this disparity becomes crucial.

Causes of the Longevity Gap

Several factors contribute to the disparity in life expectancy between men and women.

First, men are more prone to certain health conditions that increase mortality rates.

For instance, men have a higher prevalence of diabetes and cancer-related deaths.

Furthermore, suicide rates are four times higher among men, and men account for 72% of motor vehicle crash deaths.

Biological and Cultural Factors

Biological factors, such as hormonal differences, can influence men’s vulnerability to certain illnesses.

Testosterone, a hormone more prevalent in men, has been associated with weakened immune responses and an increased risk of heart disease.

However, cultural factors also play a significant role.

Men often face societal pressure to suppress their emotions and avoid seeking help for mental health issues.

This cultural stigma can contribute to higher rates of depression and suicide among men.

Additionally, men tend to be less proactive in seeking preventive care compared to women.

They are less likely to undergo routine check-ups or screenings, delaying the diagnosis and treatment of potential health issues.

Cultural expectations, societal norms, and perceived invincibility can deter men from prioritizing their health until they reach middle age, often leading to delayed intervention and the accumulation of health problems.