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> But somebody who is 10 today, will likely have a life > expectancy much longer than the 80 years Turns out there's a _highly_ developed and mature predic

> But somebody who is 10 today, will likely have a life > expectancy much longer than the 80 years Turns out there's a _highly_ developed and mature prediction market for this called life insurance, and they disagree with your assessment.

jtemplin 11y ago
You're saying we have access to the premiums on a 70+ year life insurance policy for a 10-year-old, or at least a reliable proxy?
- peteretep 11y ago
  If you're asking "Can I insure my newborn for the rest of their life for a predictable premium?" the answer is yes.
  - ghshephard 11y ago
    Indeed (though this one doesn't cover newborns, need to be at least 15 days old): https://www.sbli.com/products/life-insurance/whole-life-for-children https://www.sbli.com/products/life-insurance/whole-life-for-...
    - jsprogrammer 11y ago
      Yes, but what is the implied life expectancy? I'd guess pretty low. Also note that policies like this require ongoing maintenance payments, otherwise you forfeit past payments and benefits. The problem with claiming that the life insurance market is a predictor for death statistics is that firms tend to keep the most important data and calculations used to derive their pricing schemes secret. The firm is only concerned with keeping to projections as far out as they can model. The consumer has no real input into the model (except as a selector of alternatives) and therefore cannot obtain much knowledge about actual death statistics (except perhaps a near meaningless lower-bound).
      - ghshephard 11y ago
        There is a One-time payment option.
reasonattlm 11y ago
An industry that will be destroyed or bailed out when there is a large upward discontinuity in life expectancy trends thanks to advances in medicine. There is a very big change going on in medical research at the moment, shifting from not trying to treat aging as a medical condition to actually treating aging and its causes. The difference in outcomes will be night and day; some relevant technologies are transferring out of the lab and into startups even now. E.g. Gensight in France, Pentraxin Therapeutics Ltd in the UK, Oison Biotech and Human Rejuvenation Technologies in the US. Anyway, pensions and life insurance will most likely be bailed out when the crash comes, and the expectation of this socialization of losses might explain some of what is observed there in the sense that they are not responding aggressively to the actuarial community's ever more strident warnings on the uncertainty of their projections. Also people are not particularly rational in their expectations about aging - see this for example, a survey of the actuaries who are the same time as warning that life expectancy predictions are increasingly uncertain due to medical advances in the works, still base their future expectations on what happened to their grandparents: https://www.dovepress.com/longevity-expectations-in-the-pension-fund-insurance-and-employee-bene-peer-reviewed-fulltext-article-PRBM https://www.dovepress.com/longevity-expectations-in-the-pens...
- spenczar5 11y ago
  You undermine the force of your argument by saying "when" and "will be" instead of "if" and "could be". All predictions are probabilistic, after all!
- AnimalMuppet 11y ago
  I don't think that will destroy the life insurance industry. In fact, I think it will help them. If I buy a life insurance policy for a 15 year old today, I pay them $X in order to receive $Y when the insured dies. If the insured lives for 70 years, the insurance company has 70 years to invest $X, in order to have $Y available when the insured dies. But if the insured lives 80 years, then the insurance company has 10 more years to invest $X. They gain from that situation, rather than lose.
  - ishi 11y ago
fredkbloggs 11y ago
But they're probably wrong, too. Insurers have a lot of money riding on the actuarial tables, but they're still just a wisdom-of-crowds best guess. No one will know what the true life expectancy was of everyone born this year until the last of them dies; similarly, no one will know the true remaining life expectancy of everyone who is currently 50 years old until the last of them dies. I agree that actuaries are taking into consideration a lot more data and experience than any HN armchair futurist, but that doesn't mean they're going to be right. Until the 1970s, most of the increase in life expectancy at birth was due to reductions in child mortality, which from an actuarial standpoint is not very interesting because it's rare for infants to have life insurance policies. The life expectancy of a 40-year-old didn't change much from 1850 until then (source: http://www.infoplease.com/ipa/A0005140.html http://www.infoplease.com/ipa/A0005140.html). In essence, nearly everyone now makes it to 40, and what's changed greatly since is what happens after that. The widespread concern is that it's not well understood whether that trend will continue, accelerate rapidly (and if so, whether the mean will increase, skew will increase, or both), or even reverse. Actuaries are professionals paid to make good guesses; they do it well, but they are not oracles.

jtemplin 11y ago

You're saying we have access to the premiums on a 70+ year life insurance policy for a 10-year-old, or at least a reliable proxy?

peteretep 11y ago
If you're asking "Can I insure my newborn for the rest of their life for a predictable premium?" the answer is yes.
- ghshephard 11y ago
  Indeed (though this one doesn't cover newborns, need to be at least 15 days old): https://www.sbli.com/products/life-insurance/whole-life-for-children https://www.sbli.com/products/life-insurance/whole-life-for-...
  - jsprogrammer 11y ago
    Yes, but what is the implied life expectancy? I'd guess pretty low. Also note that policies like this require ongoing maintenance payments, otherwise you forfeit past payments and benefits. The problem with claiming that the life insurance market is a predictor for death statistics is that firms tend to keep the most important data and calculations used to derive their pricing schemes secret. The firm is only concerned with keeping to projections as far out as they can model. The consumer has no real input into the model (except as a selector of alternatives) and therefore cannot obtain much knowledge about actual death statistics (except perhaps a near meaningless lower-bound).
    - ghshephard 11y ago
      There is a One-time payment option.

reasonattlm 11y ago

An industry that will be destroyed or bailed out when there is a large upward discontinuity in life expectancy trends thanks to advances in medicine. There is a very big change going on in medical research at the moment, shifting from not trying to treat aging as a medical condition to actually treating aging and its causes. The difference in outcomes will be night and day; some relevant technologies are transferring out of the lab and into startups even now. E.g. Gensight in France, Pentraxin Therapeutics Ltd in the UK, Oison Biotech and Human Rejuvenation Technologies in the US. Anyway, pensions and life insurance will most likely be bailed out when the crash comes, and the expectation of this socialization of losses might explain some of what is observed there in the sense that they are not responding aggressively to the actuarial community's ever more strident warnings on the uncertainty of their projections. Also people are not particularly rational in their expectations about aging - see this for example, a survey of the actuaries who are the same time as warning that life expectancy predictions are increasingly uncertain due to medical advances in the works, still base their future expectations on what happened to their grandparents: https://www.dovepress.com/longevity-expectations-in-the-pension-fund-insurance-and-employee-bene-peer-reviewed-fulltext-article-PRBM https://www.dovepress.com/longevity-expectations-in-the-pens...

spenczar5 11y ago
You undermine the force of your argument by saying "when" and "will be" instead of "if" and "could be". All predictions are probabilistic, after all!
AnimalMuppet 11y ago
I don't think that will destroy the life insurance industry. In fact, I think it will help them. If I buy a life insurance policy for a 15 year old today, I pay them $X in order to receive $Y when the insured dies. If the insured lives for 70 years, the insurance company has 70 years to invest $X, in order to have $Y available when the insured dies. But if the insured lives 80 years, then the insurance company has 10 more years to invest $X. They gain from that situation, rather than lose.
- ishi 11y ago

fredkbloggs 11y ago

But they're probably wrong, too. Insurers have a lot of money riding on the actuarial tables, but they're still just a wisdom-of-crowds best guess. No one will know what the true life expectancy was of everyone born this year until the last of them dies; similarly, no one will know the true remaining life expectancy of everyone who is currently 50 years old until the last of them dies. I agree that actuaries are taking into consideration a lot more data and experience than any HN armchair futurist, but that doesn't mean they're going to be right. Until the 1970s, most of the increase in life expectancy at birth was due to reductions in child mortality, which from an actuarial standpoint is not very interesting because it's rare for infants to have life insurance policies. The life expectancy of a 40-year-old didn't change much from 1850 until then (source: http://www.infoplease.com/ipa/A0005140.html http://www.infoplease.com/ipa/A0005140.html). In essence, nearly everyone now makes it to 40, and what's changed greatly since is what happens after that. The widespread concern is that it's not well understood whether that trend will continue, accelerate rapidly (and if so, whether the mean will increase, skew will increase, or both), or even reverse. Actuaries are professionals paid to make good guesses; they do it well, but they are not oracles.