A Mortality Table, also known as a life table or actuarial table, catalogs the death rates for a specific population at various ages, typically expressing this information as the number of deaths per thousand people for each age group. These tables are essential in the fields of insurance, specifically in life insurance to calculate premiums and define policy rates, and also in pensions and annuity calculations.
Key Points
- Purpose: Mortality tables are used primarily to assess risk in life insurance and related financial services, aiding in the determination of premiums and benefits.
- Structure: The table provides yearly data on the probability of death before the next birthday, starting from a predetermined number base, usually 100,000.
- Application in Insurance: Insurers apply these tables to predict mortality among a group covered by insurance policies, helping actuaries and underwriters define premium amounts.
- Legal and Regulatory Framework: Mortality tables also have a regulatory component and may differ widely based on the demographic specifics of the region. For example, the National Association of Insurance Commissioners (NAIC) provides regulatory oversight in the U.S., although specifics may vary by state.
- Dynamic Adjustments: Advances in healthcare, among other changes, require these tables to be updated regularly to remain accurate.
Resources
For further reading, refer to laws and regulations concerning actuarial practice such as:
- [Model Standard Valuation Law] provided by the NAIC
- Society of Actuaries for professional guidelines and ongoing updates on actuarial standards.
