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.
BREAKING DOWN '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.