DEFINITION of Actuarial Age

Actuarial age is an individual's life expectancy based on calculations and statistical modeling. Actuaries use mathematical and statistical computations to predict a person's life expectancy, or his or her actuarial age, to assist insurance companies with pricing, forecasting and planning. For instance, knowing a person's actuarial age will help determine the most appropriate payments from an annuity.


A person's actuarial age is the age to which mathematical and statistical modeling indicate a person will live. The actuarial age reflects factors such as health and serious medical conditions. Actuaries assess risk for insurance companies and use computerized predictive modeling to project probable outcomes for a wide variety of circumstances.

Determining Your Actuarial Age

The Social Security Administration has a handy table to show the average person's life expectancy at various ages. For example, a person aged 60 can expect to live another 21.5 years. However, once you get even older, the years you'd be expected to live actually increase proportionally. At age 70, the table indicates you'll live another 14.3 years.

This is a simple example of how actuaries look at longevity, but there's much more to it. Actuaries have algorithms that take into account many other factors, for example, whether you have high blood pressure or cholesterol, your family history and more. However, the four major factors affecting longevity are: age, gender, smoking and health.

Consumers can use online calculators to get a rough estimate of their own actuarial age. This can be useful in financial planning and for when you decide to begin collecting Social Security, for example.

This is not to say that your actuarial age is infallible or set in stone. Many people live much longer or shorter than their actuarial age. But used in the insurance industry across thousands and millions of people, the numbers come very close to reality and make it possible to charge fair prices for life and disability insurance, to name a few.

The process gets more complicated when insurers take into account secondary beneficiaries such as a spouse or second-generation beneficiaries including children. The longer the expectancy of the lives involved, the cheaper the life insurance policy in general. On the other hand, those of advanced age can expect to pay very high rates for any kind of life coverage. At age 80, the SSA table estimates the average person has 8.2 years to live, so any payments collected must reflect the high probability of a payout relatively soon.