Investing & Money
piece written on the 29th September 2015 by  

I read an incredibly interesting article this weekend about longevity and wanted to share some really interesting facts that I pulled from the article, facts that you probably didn’t know:

  • By 2055 there will be more people over the age of 60 than people under the age of 15.
  • Sub-Sahara Africa is the only place across the globe that still has high levels of child bearing.
  • In the next 10 years, half of European’s population will be older than 50. On the other hand, Africa is set to be the youngest population in the world.
  • Child bearing has slowed considerably in China and India, but has increased in Africa.
  • The larger younger demographic in Africa has incredible advantages provided the younger generation is educated correctly.

“Although the population across Africa will remain relatively young, this does not exclude them from people living longer, resulting in a larger number of older people. We have to come to terms with the fact that we will have people in their seventies and even eighties, actively contributing to our workforce by the end of this century and this will have a major impact on the way we structure risk related insurance.”

I, personally, don’t feel that people understand the significant changes that come into play when people start living until older ages. Let me put across a simple example, most people think that you retire around the age of 65 and then live out the next 20 years of your life on your pension. But imagine you retire at 65 and the average person lives to 100, that’s an additional 15 years of life in comparison. Think of it like this: Either we’ll have to retire later or we’ll have to save that much more to cater for those additional 15 years. Think of 15 years (180 months) of additional expenses! This poses a huge problem for people retiring and unravels a whole new discussion in itself, but the point I’m trying to drive across here is that it’s a reality and it needs to be taken into account and respected. Before I move on, perhaps I should say: Imagine the pressure this puts on our government who have to support and fund retiring individuals on shrinking tax revenue.

Longevity does not have to be about negative matters though, careful and accurate planning will avoid these problems. The most important thing to remember is that as you get older your chances of illness are higher and these come at a large costs. Without the correct cover a huge amount of strain will be brought into the equation. “Living longer does not necessarily mean living healthy”.

Introducing Myriad’s Longevity Protector

Up until now we’ve all operated on a concept of being protected (risk insurance protected) against life-changing events like dying too soon or living with a disability or critical illness. Based on this article I think it’s quite clear that this traditional model isn’t the ideal fit with all the changes that are happening. We’ve missed the fact that making provision for living too long is hugely important.

This is where Myriad’s Longevity Protector comes into play, a new, fresh and innovative approach to protecting against longevity. Out living one’s capital should not be taken lightly and Myriad have made sure that their Longevity Protection Benefit addresses this, head-on. This one-of-a-kind protector transfers the risk of their clients outliving their capital (whether it’s critical illness, disability or simply living much longer).

I, personally, have crunched the numbers around living longer and I cannot stress how scary the figures are. Let’s take a really simple example, if you live 10 years longer than expected and you require R10,000 per month to survive, that’s an additional R1,200,000 that you will need access to and this doesn’t even take illness or the likes into account. An additional R1,200,000 (as a bare minimum) puts a huge strain on a person when they are still working to ensure that money is being saved accordingly. I say, “puts a huge strain”, but reality is that it might not even be possible to plan for that financially! This post may be a post I’m writing for Momentum but I think it’s clear that this really is a concern and really should be thought about at great length. Take the time to find out more about the Longevity Protector, you might not think you need to now, but trust me, this is a situation where sooner is better than later.