American Experience Table

AAA

DEFINITION of 'American Experience Table'

A set of data, presented in table format, showing when Americans of various ages have died. This data allows life insurance companies to evaluate the likelihood that an individual will die at a certain age, which helps them to establish life insurance premiums. The American experience table uses a data set of 100,000 Americans who were alive at age 10 and showed how many of that group died each year. It was commonly used until the Commissioners Standard Ordinary (CSO) table became more common.

INVESTOPEDIA EXPLAINS 'American Experience Table'

The creation of accurate mortality tables is crucial to the financial viability of life insurance companies. As such, there are many different types of mortality tables. Some are considered more accurate or more appropriate than others depending on the situation. For example, one type of mortality table, the ultimate mortality table, excludes individuals who have recently purchased life insurance since these individuals had to pass medical exams to obtain the insurance and are known to be healthy. Other tables might account for the effects of gender weight, and tobacco use on expected mortality rates.



RELATED TERMS
  1. Commissioners Standard Ordinary ...

    An actuarial table used to compute the minimum nonforfeiture ...
  2. Ultimate Mortality Table

    A mortality table that lists the death rates of insured persons ...
  3. Mortality Table

    A table that shows the rate of deaths occurring in a defined ...
  4. Life Insurance

    A protection against the loss of income that would result if ...
  5. Insurance Underwriter

    A financial professional that evaluates the risks of insuring ...
  6. Insurance

    A contract (policy) in which an individual or entity receives ...
Related Articles
  1. Home & Auto

    The History Of Insurance In America

    Insurance was a latecomer to the American landscape, largely due to the country's unknown risks.
  2. Retirement

    Variable Vs. Variable Universal Life Insurance

    Do you know why you might need one policy versus the other? Read on to find out.
  3. Retirement

    Life Insurance: How To Get the Most Out Of Your Policy

    There are many benefits to owning a life insurance policy - if you get the right one for you.
  4. Home & Auto

    Life Insurance Clauses Determine Your Coverage

    Understanding these key parts of your policy will help you to ensure that your family will be covered.
  5. Fundamental Analysis

    What is a Null Hypothesis?

    In statistics, a null hypothesis is assumed true until proven otherwise.
  6. Insurance

    Life Insurance: How Much Does Age Raise Your Rate?

    If you need life insurance, try to get it before your next birthday. Here's why.
  7. Insurance

    What Happens If Your Insurance Company Goes Bankrupt?

    When insurance companies go bankrupt or face financial difficulty, it's bad news for policy holders.
  8. Investing

    How to Use Stratified Random Sampling

    Stratified random sampling is a technique best used with a sample population easily broken into distinct subgroups. Samples are then taken from each subgroup based on the ratio of the subgroup’s ...
  9. Insurance

    Should You Borrow From Your Life Insurance?

    A loan against the cash value of your life insurance isn't the best way to raise money – but sometimes it's the best choice you have. How to decide.
  10. Insurance

    Life Insurance: How Long Does It Take To Get Paid?

    How to file for a life insurance payout – and how long it takes to receive it. Plus, new ways to plan for payments that provide an income stream.

You May Also Like

Hot Definitions
  1. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  2. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  3. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  4. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  5. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  6. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
Trading Center