DEFINITION of 'Valuation Mortality Table'

A statistical chart that is used by insurance companies to calculate the statutory reserve and cash surrender values of life insurance policies. A mortality table shows the death rate at any given age in terms of the number of deaths that occur for every thousand individuals of that age; it provides statistics regarding the likelihood that a person of a given age will live X number of years. This allows the insurance company to assess risks in policies.

BREAKING DOWN 'Valuation Mortality Table'

A valuation mortality table typically has a safety margin integrated into the mortality rates to protect the insurers. Life insurance companies use valuation mortality tables to determine the amount of liquid assets that they are required by statute to set aside for claims and benefits - the legal reserve.

RELATED TERMS
  1. Select Mortality Table

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

    Data on the death rate of everyone who has purchased life insurance, ...
  3. Mortality Table

    A table that shows the rate of deaths occurring in a defined ...
  4. Underlying Mortality Assumption

    Projections of expected death rates used by actuaries to estimate ...
  5. Commissioners Standard Ordinary ...

    An actuarial table used to compute the minimum nonforfeiture ...
  6. Yearly Probability Of Dying

    A numerical figure that depicts the likelihood of someone dying ...
Related Articles
  1. Insurance

    Extreme Mortality Bonds: High Risk and High Reward

    Insurance companies issue extreme mortality bonds to cover their losses in the event of a large-scale disaster. Here's a look into these high-risk, high-reward bonds.
  2. Insurance

    Calculating Yearly Probability of Dying

    The yearly probability of dying is a figure that predicts annual death rates for a population.
  3. Financial Advisor

    Advising FAs: Explaining Life Insurance to a Client

    Life insurance was initially designed to protect the income of families, particularly young families in the wealth accumulation phase, in the event of the head of household's death.
  4. Insurance

    Term Life Insurance: Everything You Need to Know

    Term life insurance is an affordable way to financially protect your loved ones after your death. Here's what you need to know before purchasing a policy.
  5. Insurance

    Tips for Helping Clients with Life Insurance Needs

    Life insurance needs will likely change over the client’s lifetime and again financial advisers can provide an objective sounding board.
  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. Financial Advisor

    Why the Wealthy Should Buy Lots of Life Insurance

    Wealthy clients have an enviable problem — managing, preserving and growing wealth. Properly structured life insurance can help with these goals.
  8. Insurance

    Understanding Cash Surrender Value

    The amount of money an insurance company pays the owner of an insurance policy if the policy is voluntarily surrendered prior to the event that is insured
  9. Insurance

    How To Invest In Insurance Companies

    Knowing the special circumstances that insurance companies operate under helps in evaluating whether or not a listed insurance company is a good investment and whether the economic environment ...
Hot Definitions
  1. Straddle

    An options strategy in which the investor holds a position in both a call and put with the same strike price and expiration ...
  2. Trickle-Down Theory

    An economic idea which states that decreasing marginal and capital gains tax rates - especially for corporations, investors ...
  3. North American Free Trade Agreement - NAFTA

    A regulation implemented on Jan. 1, 1994, that eventually eliminated tariffs to encourage economic activity between the United ...
  4. Agency Theory

    A supposition that explains the relationship between principals and agents in business. Agency theory is concerned with resolving ...
  5. Treasury Bill - T-Bill

    A short-term debt obligation backed by the U.S. government with a maturity of less than one year. T-bills are sold in denominations ...
  6. Index

    A statistical measure of change in an economy or a securities market. In the case of financial markets, an index is a hypothetical ...
Trading Center