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First health, soon wealth

WHO KNEW THAT living longer could leave a little more cash in pocket? Besides actuaries, of course.

Life insurance regulators at last are reworking their creaky tables of life expectancy. They predict, everything being equal, that 30-year-old men now will live to age 77, five years longer than they estimated in 1980, while 30-year-old women will reach 81, an extra four years. They even counted in the growing numbers whose girth keeps growing.

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That's some 35,000 extra hours for mingling, strolling, sleeping, everything. And a little extra money for those who have already budgeted for their life insurance premiums.

As state regulators adopt the new tables, they will reduce the amount of money insurers must keep on hand to pay future death benefits. For tax reasons, the gray-suit-and-slide-rule crowd won't want to keep more cash than necessary sitting around, and most are expected to cut premiums, especially on new term life insurance plans.

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Quick-thinking insurers already are cutting rates, saving many people a handful of 20s a year. Chump change now, maybe, but it would build to a small fortune in one's own reserve fund for later. Such a fund might well be necessary for people who live up to the tables' new ultimate life expectancy - 120 years.

This latest drop could be icing for some: While technical changes boosted premiums briefly in 2000, the cost of term life insurance has been declining as insurers learned to sell via the Web and as increasingly savvy consumers started shopping around. Those who own annuities also have seen the benefit as insurers have included the revised tables into their current rates.

As unintended consequences go, getting a rebate just for revising the drearily named mortality rate tables is pretty good.

And doesn't knowing that life will stretch a little longer put, say, a season of drips and downpours into better perspective?


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