Let’s face it: if you’re in your late twenties or in your thirties, the odds that you will die in a given year are fairly low.
According to the Australian Life Tables 2005-2007 published by the Australian Government Actuary in 2009, the odds of a male dying in a given year between the ages of 25 and 40 are between 0.083% and 0.136%. The odds for a woman are between 0.03% and 0.07%.
Pretty good odds, right?
They’re certainly not bad. And even if you compound the odds of dying in a given year between the ages 25 and 40, it would appear that the odds of a randomly selected 25 year old dying before they reach 40 is less than 2% if he is male, and less than 1% if she is female. (A 35 year old man has a 97% likelihood of living to 50.)
Not bad, right?
But… that’s one in every fifty or one hundred people.
Think it about it in this way: if you have 300 Facebook friends in their late twenties to early thirties, the odds are that three of your male friends and two of your female friends are likely to pass away in the next fifteen years.
Can you imagine what the impact for the family of these people will be if they have not clearly stated their desires regarding guardianship for their children, and if the distribution of their assets is not in line with what might be suitable for their family?
Even if you think the odds that the worst will happen to you are low, it’s important to think in terms of consequences. The consequences for you personally are about as high as they get. And if you pass away, this is likely to have a major financial impact on your partner and your children.
For this reason, you are likely to have life insurance arrangements in place. You might spend a fairly large portion of your income on life insurance, because you are sensitive to the consequences of such a “low probability, highly impactful” (black swan) event.
It stands to reason that you should prepare a will based on your current circumstances and objectives, in case the odds are not in your favour.
And ultimately, the time will come for all of us. To quote the movie Fight Club: “On a long enough time line, the survival rate for everyone drops to zero.”