Purchasing life insurance marks the soundest financial investment many make to provide their loved ones with the means to survive in the case of untimely death. It makes sense — even while we mourn, landlords and utility companies still demand payment if we hope to keep a roof over our heads and power our appliances. However, few among us give pause to consider how climate change may impact the monthly amount we pay to keep our families safe.
Recent increases in the severity of wildfires and hurricanes serve as an exclamation point that human beings need to change their polluting ways or risk extinction. However, despite the warnings of scientists, relatively few insurers have diversified their investment portfolios to include more renewable and sustainable business practices. The result may mean passing on rising costs to consumers.
Bigger National Disasters Lead to Greater Mortality Rates
In recent years, the U.S. has experienced an increased number of hurricanes of Category three or higher. Hurricane Maria, which decimated Puerto Rico and parts of Florida in 2017, claimed anywhere from a few hundred to thousands of lives. Nor was Maria the only deadly storm to batter the east coast of the nation of late — Hurricanes Harvey and Irma likewise claimed dozens of lives while causing billions of dollars in damage.
In the west, a rampage of wildfires has caused death and destruction. The California wildfire season of 2018 proved the most deadly in recent memory. The city of Paradise, CA, will never return to its former grandeur as a retreat for wealthy celebrities and Silicon Valley bigwigs after the Camp Fire ravaged the city and claimed 85 or more human lives.
Should climate change continue unfettered, more severe natural disasters will arise. And this raises the hackles of actuary agents everywhere. Already in 2018, the life expectancy of U.S. citizens lagged behind that of other developed nations and earned the distinction of being the only industrialized nation where the average age of death fell below 80.
Given that insurance companies use a mathematical formula to determine rates, the increase in natural disasters paired with decreasing life expectancy will result in higher monthly rates for all. Young couples and families who have yet to shop around for policies should cease procrastinating as this may result in paying far more in premiums.
Climate Change Leads to Poorer Health Outcomes
Risks of sudden death due to natural disaster isn't the only factor that may drive up life insurance rates. Areas most affected by climate change see higher rates of infectious and chronic diseases.
In areas choked by smog, air pollution increases the risk of developing upper respiratory infections and lung diseases, including cancer. High particulate levels also cause more severe allergy symptoms which limits productivity in the workplace.
Increases in global temperatures result in the rise of dangerous strains of algae in many drinking water supplies. Additionally, as some areas of the United States continue to struggle with crumbling infrastructure, water quality remains dubious in many locations. As many as 63 million Americans suffered exposure to unsafe drinking water in the last decade.
Exposure to high pollution levels also impacts the brain and central nervous system. Many neurologists express concern about the role of increased pollution in causing or exacerbating diseases such as Alzheimer's and Parkinson's disease. Pollutants can cause changes in the blood-brain barrier, and some theorize that exposure impacts the recent rise in mental illness and death.
Finally, exposure to pollution lowers immune system functioning, making people more susceptible to infectious diseases. Areas with large homeless populations have recently witnessed the resurgence of diseases like typhus which were long considered eradicated.
Growing levels of pollution may likewise influence the increase in autoimmune diseases such as Crohn's and rheumatoid arthritis. In such illnesses, the immune system goes haywire, causing the body to attack its own tissue. Exposure to high ozone levels has proven to cause changes in the immune response of laboratory mice.
The Impact on Insurance
When life insurance companies issue a policy, they typically require a medical examination. While factors such as age and lifestyle do play a role — skydivers, for example, may pay higher rates — poor physical health drives premium prices out of reach for some. As climate change continues to impact human health, those considering buying a policy do well to act quickly in establishing one as soon as possible.
Environmental catastrophes such as hurricanes and wildfires mean insurers receive a glut of claims after such events. To meet demand, insurers need to maintain their own investments to continue generating sufficient capital to pay claims quickly. As many insurers hold real property assets in coastal areas often targeted by severe storms, each large-scale disasters may drive rates up further.
Protecting Your Family
Life insurance provides many Americans with the financial peace of mind that their loved ones will remain cared for after they pass. However, environmental disasters and declining public health outcomes may cause rates to rise. The best time to protect your family is now.