This risk can be decomposed in two components: (i) the risk that the insured will live longer than the rest of her/his cohort (this is a proper insurance risk, which by its very nature cancels out if the pool of policies is big enough); and (ii) the risk that the average longevity of an entire cohort will prove to have been underestimated (this is an aggregate risk that cannot be easily diversified away).
Ben S Bernanke: The Supervisory Capital Assessment Program Speech by Mr Ben S Bernanke, Chairman of the Board of Governors of the US Federal Reserve System, at the Federal Reserve Bank of Atlanta 2009 Financial Markets Conference, Jekyll Island, Georgia, 11 May 2009.