Ultimate Mortality Table

AAA

DEFINITION of 'Ultimate Mortality Table'

A mortality table that lists the death rates of insured persons of each sex and age group and excludes data from policies that have been recently underwritten. An ultimate mortality table also lists the proportion of individual survival from birth to any given age. Insurance companies use these tables to price insurance products and ultimately the profitability of these insurance companies depend upon correct analysis of the table.

INVESTOPEDIA EXPLAINS 'Ultimate Mortality Table'

By removing the first few years of life insurance data from the table, the ultimate mortality table more accurately shows the rate of mortality after removing selection effects. People who just received life insurance will have usually just had a medical exam and are relatively healthy and so this table attempts to remove that effect.

The calculation of an ultimate mortality table affects insurance requirement reserves and proper pricing by insurance companies. Along with death and survival rates amongst age groups and sexes, mortality tables can also list survival and death rates in relation to weight, ethnicity and region.

RELATED TERMS
  1. American Experience Table

    A set of data, presented in table format, showing when Americans ...
  2. Select Mortality Table

    A mortality table which outlines life contingency statistics ...
  3. Aggregate Mortality Table

    Data on the death rate of everyone who has purchased life insurance, ...
  4. Act Of God Bond

    A bond issued by an insurance company, linking principal and ...
  5. Actuarial Analysis

    The examination of risk by a highly educated and certified professional ...
  6. Life Expectancy

    1. The age until which a person is expected to live. 2. The ...
RELATED FAQS
  1. What is multiline insurance?

    The term "multiline insurance" can refer to multiline contracts and multiline insurers, so let's take a look at both variations. ... Read Full Answer >>
  2. Why is my insurance premium so high/low?

    Insurance premiums can be affected by many factors including: type and amount of risk size of deductible amount of coverage age ... Read Full Answer >>
  3. How do I change my contingent beneficiary?

    Keeping your beneficiary designations up to date is an important aspect of comprehensive estate planning. Listing a primary ... Read Full Answer >>
  4. What's the difference between a collateralized debt obligation (CDO) and a collateralized ...

    A collateralized mortgage obligation, or CMO, is a type of mortgage-backed security (MBS) issued by an lender that handles ... Read Full Answer >>
  5. If both the primary and contingent beneficiaries are unavailable, what happens to ...

    One of the most common mistakes in estate planning is not keeping beneficiary designations up to date on life insurance policies ... Read Full Answer >>
  6. What types of insurance policies have contingent beneficiaries?

    A contingent beneficiary is a person designated to receive the benefits of an insurance policy or retirement account if the ... Read Full Answer >>
Related Articles
  1. Home & Auto

    The History Of Insurance

    The first written policy appeared in Hammurabi's Code. Find out how it evolved from there.
  2. Insurance

    15 Insurance Policies You Don't Need

    Learn how to save money by saying "no" to unnecessary coverage.
  3. Options & Futures

    Getting the Whole Story on Variable Annuities

    Variable annuities are another way to save money tax-deferred - but don't jump in blindly!
  4. Home & Auto

    Taking The Surprise Out Of Long-Term Care

    Don't be caught unprepared - find out what to look for in LTC insurance policies.
  5. Home & Auto

    Long-Term Care Insurance: Who Needs It?

    No one is immune to the possibility of one day needing long-term care - and the costs can deplete a life savings.
  6. Insurance

    Life Insurance: Putting A Price On Peace Of Mind

    Would your death leave loved ones financially stranded? Find out how to ease your mind and keep them protected.
  7. Home & Auto

    A Multipurpose Future Planning Tool

    Overfunded variable universal life insurance policies can be an all-in-one financial solution.
  8. Economics

    What is Adverse Selection?

    Adverse selection occurs when one party in a transaction has more information than the other, especially in insurance and finance-related activities.
  9. Insurance

    Homeowners Insurance Losers: States That Pay Most

    Which states charge you the most for homeowner's insurance? Hint: They're regularly featured on the Weather Channel.
  10. Professionals

    Helping Clients Choose Long-Term Care Insurance

    The need for long-term care has become an inescapable (and pricey) issue for retirees. Here's what financial advisors can do to help.

You May Also Like

Hot Definitions
  1. Fixed-Income Arbitrage

    An investment strategy that attempts to profit from arbitrage opportunities in interest rate securities. When using a fixed-income ...
  2. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  3. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  4. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  5. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  6. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
Trading Center