1
Q
What method did early societies use to fund death benefits?
A
Post-death method
Each member paid a specific amount upon the death of a fellow member, with the society receiving a small fee for administration.
2
Q
List the three problems with the post-death method of funding death benefits.
A
- Contributions were voluntary
- Diminishing group size due to deaths
- Increasing claims leading to reduced benefits
These issues highlighted the need for a more reliable funding method.
3
Q
What funding method did friendly societies adopt to cope with the problems of the post-death method?
A
Assessment method
This method involved assessing each member an equal amount in advance for a specified period of protection.
4
Q
What is the purpose of life tables?
A
To project the number of deaths likely to occur over a covered period
This projection is essential for funding plans in friendly societies.
5
Q
What do all life tables contain?
A
Annual mortality rates tabulated by age, sex, and other factors
These tables are constructed using similar principles.
6
Q
How are mortality rates for different ages calculated?
A
By observing the number of deaths (dx) and determining the number of individuals exposed to the risk of dying
This calculation is done over a specified period, designated by ‘x’.
7
Q
What is exposure (Ex) expressed as?
A
The product of the number of individuals alive at the beginning of an interval who are exposed to the risk of dying (Ix) and the duration of exposure, usually in years
Exposure is almost always expressed as person-year.
8
Q
How is the interval mortality rate (qx) calculated?
A
By dividing the number of deaths occurring during an interval by the corresponding exposure (qx=d/Ex)
Mortality rates are typically annual mortality rates.
9
Q
Define Ix in the context of mortality analysis.
A
Number of individuals alive at the beginning of an interval (x) who are exposed to risk of dying
It is a key component in calculating exposure.
10
Q
What does dx represent?
A
Number of deaths during an interval
It is used in calculating the interval mortality rate.
11
Q
What is the formula for Ex?
A
Ex = (persons exposed to risk of dying) * (duration of interval exposure), usually expressed in person-years
This helps quantify the exposure during a specific interval.
12
Q
What is the relationship between mortality rates and life insurance pricing?
A
Many life insurance tables are based on the monetary amounts of claims instead of the number of deaths
This substitutes the total monetary amount of insurance in force for exposure.
13
Q
True or false: The ratio of actual death benefits paid to the total in force amount of insurance is a true mortality rate.
A
FALSE
It is analogous to a true mortality rate but not a true mortality rate in the strict sense.
14
Q
Why is expressing mortality rates in monetary terms advantageous?
A
- Weighting mortality experience by policy size
- Providing a better indication of the financial impact of mortality
This allows for more accurate forecasting of mortality costs.
15
Q
What factors are considered when setting pricing assumptions for life insurance?
A
- Time value of money
- Policy lapse rates
These factors help to more accurately forecast mortality costs.
16
Q
How does inflation affect future claims in life insurance?
A
It erodes the future value of fixed death benefits
A claim occurring in the future will have less financial impact than one occurring shortly after policy issue.
17
Q
What happens to premiums paid if a policyholder allows their policy to lapse?
A
They, along with accumulated interest, will no longer be ‘exposed’ to the risk of a claim
This affects the pricing assumptions for future claims.
18
Q
What is the impact of the growth of secondary markets for life insurance policies?
A
Threatens to reduce policy lapse rates
This can adversely affect the profitability of life insurance companies.
19
Q
What do viatical and elder life settlement companies do?
A
Purchase life insurance policies for sums greater than cash values
They receive death benefits when the insured dies.
20
Q
What is a potential consequence of viatical and life settlement companies keeping policies in force?
A
Overestimate lapse rates when setting pricing assumptions
This can lead to an underestimation of actual mortality experience.
21
Q
Name the types of life tables mentioned.
A
- Population life tables
- Period life tables
- Cohort life tables
- Insured lives life tables
Appendix C provides an explanation of how to read a life table.
22
Q
What do population life tables represent?
A
Average mortality rates across large segments of the general population
They are based on death rates calculated without regard to individual health or socioeconomic status.
23
Q
What are period life tables based on?
A
Death rates calculated from data collected over a short period (1 to 3 years)
They depict death rates for a large number of birth cohorts.
24
Q
What is the significance of the 1999-2001 U.S. Decennial Life Tables?
A
Provide annual death rates for specific age cohorts
For example, death rates for white males ages 40-41 and 50-51 are 0.00237 and 0.00507, respectively.
25
True or false: **Period life tables** assume mortality rates for different cohorts are the same.
TRUE
## Footnote
This is a simplifying assumption that can lead to inaccuracies.
26
What type of life tables does the **US Center for Health Statistics** publish?
* Annual life tables
* Decennial life tables
* State life tables
* Abridged life tables
* Cause elimination life tables
## Footnote
Annual and decennial life tables are 'complete' tables containing data for every single year of age.
27
What is the purpose of **abridged life tables**?
Calculate mortality rates when data is sparse
## Footnote
They typically contain data by 5- or 10-year age groups.
28
Why are **decennial life tables** considered more accurate than annual life tables?
More precise estimates of population size and distribution
## Footnote
They use a larger number of deaths to calculate death rates.
29
What are the **annual mortality rates** for 45-year-old females according to the 2005 US Lifetables vs 2015 VT?
100.00 deaths per 1,000 per year
## Footnote
This statistic reflects the mortality rates for different cohorts based on smoking status.
30
What is the **select period** in basic tables?
The period after policy issue during which underwriting results in lower death rates
## Footnote
Death rates immediately following policy issue are at the lowest and gradually rise over the select period.
31
What are **ultimate rates**?
Death rates following the select period
## Footnote
It is often assumed that underwriting no longer conveys a beneficial effect after 20 or 25 years.
32
What is a **cohort life table**?
A table showing annual death rates experienced by a cohort of individuals purchasing insurance at the same age
## Footnote
For example, the duration 5 select mortality rate for females who are currently 40 years old.
33
What does the **ultimate portion** of the basic table represent?
A period life table describing mortality of individuals who have kept their life insurance in force for more than 20 or 25 years
## Footnote
This includes individuals who could have entered the insured lives group at various ages.
34
True or false: The **ultimate death rates** for 60-year-old males represent the aggregate death rates for males who have kept their policy in force for at least 25 years.
TRUE
## Footnote
These individuals could have been underwritten at any age ranging from birth to age 35.
35
The **select mortality rate** for females who were 35 years old when they applied for insurance represents the mortality rate of females who are currently _______.
40 years old
## Footnote
This reflects the cohort of females insured at standard or better rates born between 1967 to 1974.
36
What are the **select and ultimate basic tables** used for?
To price life insurance products
## Footnote
Examples include the 1975-1980 SOA Basic Tables, the 1990-1995 SOA Basic Table, and the 2001, 2008, and 2015 VBT.
37
How do insurance companies modify **basic tables**?
* Applying factors that reduce projected mortality rates
* Target market selection
* Underwriting
* Secular mortality improvements
## Footnote
These modifications aim to attract new policyholders while maintaining achievable mortality goals.
38
Which type of tables typically have the **lowest mortality rates**?
Individual annuity tables
## Footnote
These tables reflect persons having the greatest longevity.
39
What are **group life tables** characterized by?
* Aggregate life tables
* Little individual underwriting
* Mortality rates on par with or slightly higher than individual select and ultimate tables
## Footnote
Selection occurs primarily because individuals must be actively employed to qualify for group insurance.
40
What do **social security or pension life tables** reflect?
Higher mortality rates close to, but somewhat less than, population rates
## Footnote
Selection is limited to individuals who have been actively employed at some time.
41
What are **standard and ordinary tables** used for?
* Setting policy reserves
* Determining cash values
## Footnote
These tables are more conservative due to loadings added to the underlying basic tables.
42
What is the mortality reflected in **standard and ordinary tables** compared to?
Social security or pension life tables
## Footnote
Some tables are aggregate period life tables combining select and ultimate experience.
43
What do **disabled lives life tables** reflect?
Mortality rates of persons no longer able to work due to disability
## Footnote
These rates are somewhat higher than general population mortality rates.
44
Fill in the blank: **Select versions of standard and ordinary tables** are also available for __________.
specific underwriting scenarios
## Footnote
These versions cater to different risk assessments.
45
What is the range of **relative mortality rates** for non-tobacco users in life tables?
20% to 40%
## Footnote
This range is compared to population mortality rates.
46
What is the range of **relative mortality rates** for tobacco users in life tables?
40% to 60%
## Footnote
This range is compared to population mortality rates.
47
What is the range of **relative mortality rates** for group, individual life and annuities?
30% to 50%
## Footnote
This range is compared to population mortality rates.
48
What is the range of **relative mortality rates** for social security (pension) in life tables?
50% to 80%
## Footnote
This range is compared to population mortality rates.
49
What is the range of **relative mortality rates** for disabled lives in life tables?
85% to 95%
## Footnote
This range is compared to population mortality rates.
50
What is the primary source for estimating the **cost of insurance** to cover mortality risk?
Medical (clinical) literature
## Footnote
This literature provides data for impairments with no insured lives data.
51
True or false: The mortality rates in **insured lives life tables** are based on actual death rates.
FALSE
## Footnote
Insured lives life tables are based on monetary values of policy amounts and claims.
52
What assumption is often made when relating **death rates** to insurance costs?
Death rate equals annual cost of insurance plus additional load
## Footnote
This assumption helps convert clinical mortality rates into insured population expectations.
53
Fill in the blank: The mortality cost for each participant is calculated as total claims divided by _______.
number of participants
## Footnote
This calculation helps determine the average mortality cost per insured person.
54
What factors differentiate the populations in **clinical studies** from those who purchase life insurance?
* Age
* Sex
* Socioeconomic status
* Risk factors
* Co-morbidities
## Footnote
These factors are important selection criteria for life insurance products.
55
What factors are used to **differentiate pricing** in life insurance?
* Age
* Sex
* Tobacco use
## Footnote
These factors lead to differences in mortality rates between clinical and insured populations.
56
True or false: Mortality results from clinical studies can be directly applied to insured populations.
FALSE
## Footnote
It is hazardous to assume that mortality results from clinical studies can be directly translated into those seen in an insured population.
57
Who popularized a method to reduce the effect of differences in populations on **excess mortality risk** calculations?
Singer and others
## Footnote
This method helps in translating clinical mortality rates into those expected among an insured group.
58
What is the first step in the method suggested by Singer and others for calculating **excess death rates**?
Compare mortality rates in a clinical population with impairment to a closely matched comparison population
## Footnote
This helps to isolate the effect of the impairment on mortality.
59
In calculating excess death rates, what is the relationship used between observed and expected mortality?
Observed mortality / Expected mortality
## Footnote
Expected mortality is often derived from a comparison population matched in characteristics except for the impairment.
60
What are the **expected mortality rates** commonly derived from when calculating excess death rates?
* Control group published in clinical study
* General population life tables adjusted for age and sex distribution
## Footnote
This adjustment reflects the characteristics of the clinical cohort.
61
How is the **extra premium** calculated to cover excess mortality risk?
Extra premium = Excess death rate (edr) + additional load for overhead and profit
## Footnote
This formula helps insurers determine the necessary premium adjustments.
62
What can the excess death rate (edr) be compared to in order to derive a **select relative mortality ratio**?
Select insured lives mortality rates
## Footnote
This comparison allows for the calculation of a table rating for premiums.
63
Fill in the blank: A study of 65-year-old males with obstructive sleep apnea found an annual mortality rate of approximately _______ deaths per 1,000 persons per year.
40
## Footnote
This rate is significantly higher than the expected mortality for non-smoking males of the same age.
64
What is the annual insured lives mortality expectation for 65-year-old non-smoking males from a contemporaneous basic select and ultimate table?
About 8 deaths per 1,000 per year
## Footnote
This figure is used for comparison against the observed mortality rate in subjects with sleep apnea.
65
True or false: Directly comparing the observed annual mortality rate among subjects with sleep apnea to the select mortality rate gives an accurate relative mortality ratio.
FALSE
## Footnote
This comparison produces an erroneously high relative mortality ratio due to the presence of co-morbid impairments.
66
What does **mortality** refer to in the context of life insurance?
The rate of death among a specific population
## Footnote
Mortality rates are often based on the experience of policyholders who are largely free of risk factors.
67
The **excess death rate (edr)** is calculated by comparing mortality rates of which two groups?
* Subjects with sleep apnea
* A comparison group matching characteristics
## Footnote
This method helps estimate the mortality risk specific to sleep apnea.
68
What is the approximate **excess mortality** for individuals with sleep apnea compared to the general population?
Approximately 162% excess mortality
## Footnote
This figure is derived from comparing the mortality rates of sleep apnea subjects to a matched group.
69
True or false: The **excess death rate (edr)** is an exact measure of mortality risk attributable to an impairment.
FALSE
## Footnote
The edr is an approximation and may overestimate risk if groups are not matched in all respects.
70
What is one alternative method to estimate mortality risk associated with an impairment?
Multivariate adjusted hazard models
## Footnote
An example is the Cox proportional hazard model, which adjusts for comorbidities.
71
Base pricing assumptions for life insurance products reflect mortality expected for individuals who are in **what condition**?
Good health and free from impairments
## Footnote
These assumptions are modified using mortality tables.
72
What are the two classes of risk pricing in life insurance?
* Standard risk classes
* Preferred risk classes
## Footnote
These classes exclude individuals with impairments or risk factors that increase mortality risk.
73
According to the American Council of Life Insurers, what percentage of individuals applying for insurance receive offers of **standard or better** premium rates?
92%
## Footnote
Only 6% receive substandard pricing, and 2% are declined coverage.
74
The excess mortality risk of impairments resulting in substandard rates is commonly expressed as either an **excess death rate (edr)** or a **relative mortality ratio (rmr)**.
True
## Footnote
These metrics help quantify the additional risk associated with impairments.
75
What is the **excess death rate** (edr)?
The difference in death rates observed in the population having the impairment compared to the death rates expected in an otherwise matched population without the impairment
## Footnote
In actuarial notation, the observed death rate is designated as q and the expected death rate is designated q'.
76
In actuarial notation, how is the **excess death rate** calculated?
edr = q - q'
## Footnote
In insured lives, the death rate is designated a', and the excess death rate is then q - q'.
77
What does the **relative mortality ratio** (rmr) represent?
The ratio between observed mortality rates (q) and expected mortality rates (q')
## Footnote
rmr = q/q'.
78
How do relative mortality ratios form a classification system for rating **substandard mortality risks**?
They represent a 25% increase in risk over that expected for standard mortality risks
## Footnote
A 'table' of excess mortality risk is used for this classification.
79
What are the two commonly used conventions for designating **table ratings**?
* Each 25% of extra risk is referred to as one table
* Letters designate the number of tables of extra premium
## Footnote
For example, 75% extra premium is equivalent to three tables of extra risk.
80
What is the ideal basis for deriving **substandard premium rates**?
An analysis of insured lives mortality experience
## Footnote
This is similar to the analysis used to set standard premium rates.
81
What is required for the results of mortality analyses to be considered **reliable**?
Sufficient exposure to produce statistical significance
## Footnote
Enough individuals with that impairment must be followed until death.
82
Why do many companies share their mortality data on **substandard issues**?
To create pooled data for inter-company mortality studies
## Footnote
Few companies have a large enough exposure on substandard policies for meaningful analysis.
83
What is a **table rating** in insurance?
A method to charge extra premiums that mirrors the pattern of excess mortality risk
## Footnote
It is used when excess mortality risk increases with each duration that the policy remains in force.
84
What is a **flat extra premium**?
An additional charge to the standard premium when excess mortality risk remains constant
## Footnote
Commonly applied to certain occupational, avocational, or foreign travel-related risks.
85
When is a **flat extra premium** typically charged?
* Military risks
* Construction work risks
* Private aviation risks
* Race car driving risks
* Foreign travel-related risks
## Footnote
These risks are associated with a constant excess mortality risk.
86
How can a **flat extra charge** be expressed?
As a dollar amount per $1,000 of insurance coverage per year
## Footnote
For example, $5.00 per $1,000 of coverage corresponds to the number of extra deaths per 1,000 insured lives per year.
87
True or false: The total premium charged to the policyholder is the same regardless of the type of policy purchased.
FALSE
## Footnote
The total premium can vary over different time periods depending on the type of policy (e.g., whole life or term policies).
88
What is necessary to convert a **permanent flat extra charge** into a **permanent table rating**?
Each company has its own method for interconversion
## Footnote
It is often necessary to convert between these two forms of rating based on the excess mortality risk.
89
What is the key factor in determining how the mortality cost of an impairment is expressed?
Correct calculation of excess mortality risk
## Footnote
From a pricing perspective, the expression method matters little if the risk is calculated correctly.
90
What is a **temporary flat extra premium** commonly charged for?
Excess mortality risk that decreases with time
## Footnote
It is expressed in terms of the average cost of the extra premium per $1,000 of coverage and the duration in years.
91
When is it preferable to express the **extra premium charge** as a flat extra?
When the underlying mortality rate is low, such as for children
## Footnote
This helps avoid using an inordinate number of tables to cover excess mortality risk.
92
In elderly applicants, why can impairments with high excess death rates represent relatively low relative mortality ratios?
Because the underlying mortality rate is high
## Footnote
This allows the excess mortality risk to be addressed with fewer rating tables.
93
What is **anti-selection** in the context of life insurance?
The tendency of individuals at increased risk of dying to apply for larger amounts of life insurance
## Footnote
This can lead to financial failure for insurance companies if not addressed.
94
Why is it important to avoid **permanent table ratings** or permanent flat extra ratings?
To prevent anti-selection
## Footnote
Permanent ratings can attract higher risk individuals and drive away lower risk individuals.
95
What happens to the mix of risks if high-risk individuals are attracted and lower-risk individuals exit the pool?
Overall mortality risk becomes substantially worse than what was priced
## Footnote
This leads to increased claims and further pricing increases.
96
In the context of cancer, when is the mortality risk particularly high?
In the early durations following diagnosis and treatment
## Footnote
This is when complications of treatment are most likely to occur.
97
What is the purpose of using **temporary flat extra ratings** for mortality risks that decrease with time?
To avoid anti-selection
## Footnote
This allows most individuals to purchase coverage at affordable prices as risks become more predictable.
98
What is the consequence of offering insurability during high-risk periods for cancer patients?
Only those at greatest risk would be willing to pay the required premium
## Footnote
This would attract the highest risks and drive away better risks.
99
What does the **Annual Mortality Rate Pattern** show in Figure 2?
* Standard Mortality
* 300% Relative Mortality Ratio
## Footnote
The pattern illustrates the differences in mortality rates over a duration of years.
100
In the context of mortality rates, what is indicated by a **300% Relative Mortality Ratio**?
A significant increase in mortality compared to standard mortality
## Footnote
This ratio is used to assess the risk associated with certain conditions or demographics.
101
What happens to the **flat extra premium** once cancer appears to have been cured?
It is usually dropped
## Footnote
Dropping the premium minimizes anti-selection and encourages better risks to remain in the insurance pool.
102
True or false: Continuing to charge an **extra premium** longer than necessary can lead to selective lapsation.
TRUE
## Footnote
This occurs when lower-risk policyholders leave for less expensive coverage, leaving higher risks in the pool.
103
What is the consequence of not dropping the **extra premium** when mortality risk returns to baseline levels?
* Higher risks remain in the pool
* Lower risk policyholders may lapse their policies
* Increased overall mortality of the business
## Footnote
The dynamics of risk and premium adjustments are critical for maintaining a balanced insurance pool.
104
Fill in the blank: The **addition of a constant excess death rate** affects the annual mortality rate pattern by _______.
increasing the overall mortality rate
## Footnote
This adjustment is reflected in the mortality rate patterns shown in Figure 2.
105
What is the **excess death rate** for males between the ages of 50 and 60 in the first year following the diagnosis and treatment of localized colon cancer?
About 30 deaths per 1,000
## Footnote
This rate gradually falls to close to zero over the next 9 years.
106
What is the average **excess death rate** over the first 10 durations?
About 12 deaths per 1,000 per year
## Footnote
This rate is used to cover the cost of excess mortality risk.
107
What is the **extra premium charge** if eligibility for insurance is postponed?
About $12.00 per $1,000 of insurance per year
## Footnote
This charge is necessary to cover the mortality cost during the initial high-risk period.
108
What does the **extra premium** reduce to during durations five through ten?
About $4.00 per $1,000 of insurance per year
## Footnote
This reduction occurs as the average excess death rate falls to about four deaths per thousand per year.
109
What are the **three objectives** of the insurance strategy described?
* Avoid speculative risks during the earliest durations
* Allow most individuals to purchase insurance at affordable prices
* Minimize anti-selection risk
## Footnote
These objectives aim to manage risks associated with high mortality rates.
110
True or false: The **postponement period** assumes speculative risks during the earliest durations.
FALSE
## Footnote
The postponement period is designed to avoid assuming speculative risks when mortality is very high.
111
What happens to insurance pricing after the **excess death rate** approaches zero?
Insurance can be offered at standard rates
## Footnote
This occurs after the first ten durations when the mortality risk has returned to baseline levels.
112
What is the **profitability** of life insurance companies dependent on?
The accuracy of their mortality assumptions
## Footnote
Understanding mortality assumptions is crucial for effective underwriting.
113
What are the **two most common types of life tables** encountered by underwriters?
* General population life tables
* Basic select and ultimate life tables
## Footnote
These tables help in setting pricing assumptions and mortality analyses.
114
What do **population life tables** tabulate?
Average annual mortality rates across large segments of the general population
## Footnote
They do not consider socioeconomic status, health, or tobacco use.
115
What do **basic select and ultimate life tables** tabulate?
Annual mortality rates for persons insured at standard or better rates by:
* Age
* Sex
* Policy duration
* Tobacco use
## Footnote
These tables reflect the effects of underwriting on mortality rates.
116
What is the **select period** in life insurance?
The period after policy issue, lasting 20-25 years, where mortality rates are substantially lower due to underwriting
## Footnote
This is because better risks are selected during underwriting.
117
What happens to mortality rates after the **select period**?
Mortality gradually deteriorates to become **ultimate mortality rates**
## Footnote
Ultimate mortality rates approach general population mortality rates but remain somewhat lower.
118
True or false: It is appropriate to convert **temporary flat extra ratings** into table ratings.
FALSE
## Footnote
Converting temporary ratings can lead to significant mismatching between annual premium and mortality risk.
119
What is the risk of mismatching between **premium and mortality risk**?
It can lead to anti-selection
## Footnote
This occurs when the policy is underpriced compared to mortality risk in early durations.
120
Fill in the blank: The **excess death rate** is calculated as the difference between the **observed cancer mortality rate** and the **expected mortality rate**.
excess death rate
## Footnote
This metric helps in understanding the additional mortality risk.
121
What do **pricing actuaries** apply to basic select and ultimate mortality rates?
Factors to reflect target market and underwriting considerations
## Footnote
The resulting pricing tables reflect future company-specific mortality expectations for individuals offered insurance at standard or better premium.
122
Most persons with **risk factors or impairments** can be offered life insurance at what type of premium rates?
Higher, substandard premium rates
## Footnote
The amount of extra premium is determined by the degree of excess mortality risk attributable to the specific impairments and risk factors.
123
What are the best sources of data to determine the **additional mortality risk** associated with impairments?
Inter-company experience studies
## Footnote
Unfortunately, only a fraction of the impairments encountered in underwriting have been studied in this manner.
124
How must the excess mortality risk for remaining impairments be determined?
Through the analysis of clinical literature
## Footnote
Methodologies have been developed to translate clinical mortality data into mortality rates likely to occur in an insured population.
125
The extra premium required to cover excess mortality risk can be charged as either a _______ or a table rating.
flat extra premium
## Footnote
A flat extra premium best covers a mortality pattern in which the excess death rate is constant.
126
A pattern of increasing excess mortality risk over time is usually covered with a _______.
table rating
## Footnote
The underwriter must be aware of impairments where the excess mortality risk decreases with time.
127
What type of extra premium will increase the risk of **anti-selection** for impairments?
Permanent flat extra or table rating
## Footnote
Charging a temporary flat extra will minimize the anti-selection risk.
128
What are **annuity life tables**?
A type of insured lives life table tabulating the mortality rates of individuals who have purchased annuities
## Footnote
Considered to represent the lowest mortality rates among insured lives.
129
What are **basic life tables** also known as?
Select and ultimate tables
## Footnote
A type of insured lives life table tabulating the death rates for individuals who purchased insurance at standard or better (preferred) rates.
130
Define **cohort (generation) life table**.
A type of life table tabulating the year-to-year death rates for a group (cohort) of individuals born around the same time
## Footnote
Example: individuals born in the same year.
131
What do **disabled lives life tables** tabulate?
The mortality rates of persons no longer able to work due to a disability
## Footnote
Useful for assessing risks associated with disability.
132
What is **flat extra rating (FE)**?
A method used in underwriting to account for extra (substandard) mortality risk by charging constant extra premium
## Footnote
This is in addition to the base (standard) premium.
133
What do **period (current) life tables** tabulate?
Death rates for a particular period of time for individuals of different ages at the time mortality data was collected
## Footnote
These tables reflect different birth cohorts.
134
What is a **population life table**?
A life table tabulating death rates for large segments of the population without regard to individual health, socioeconomic status, or employment status
## Footnote
Useful for general mortality studies.
135
What are **select factors**?
Scalar factors applied to life tables to reduce projected mortality rates to levels thought to be attractive to potential life insurance buyers
## Footnote
They help maintain achievable mortality goals.
136
Define **select period**.
The period from life insurance policy issue to the time at which the effect of underwriting is assumed to no longer be effective
## Footnote
Often considered to be about 20 to 25 years.
137
What do **social security (pension) life tables** tabulate?
The mortality rates of individuals who were actively employed at some time
## Footnote
They provide insights into the longevity of workers.
138
What are **standard and ordinary life tables**?
Aggregate insured lives life tables in which select and ultimate mortality rates are combined to arrive at aggregate death rates for each age
## Footnote
They ignore most of the effect of selection resulting from underwriting.
139
What is **table rating**?
A method used in underwriting to account for extra (substandard) mortality risk by charging extra premium based on a multiple of the base (standard) premium
## Footnote
This method adjusts premiums according to assessed risk.
140
Define **ultimate period**.
The period after the select period during which the effect of underwriting is assumed to no longer be effective
## Footnote
Often considered to be the period beyond 20 to 25 years after underwriting.
ALU 202
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