@mrvonduuren,

It's an expression people(elder generation) use on children to wish them longevity. murrayjames is right, it's less common with people(usually young people/ kids) the speaker is unfamiliar with. Not common among people the same age, either.

Just FYI, sneeze once, it's "一百岁", sneeze twice, it's "二百岁" and sometimes "一丈zhang4高".:) My parents say "一百岁"“一丈高” a lot to my 15-month-old nephew.