## What Is the Yearly Probability of Dying?

Yearly probability of dying is a statistical estimate of the likelihood of a person dying within a year, usually based on their age, sex, and sometimes other factors. It is widely used in health studies, by the government, and by the insurance industry in setting rates.

### Key Takeaways

- Yearly probability of dying is a statistical estimate of the likelihood of a person dying within a year, based on their age, sex, and other factors.
- An individual's probability of dying is reflected in mortality tables and often used in setting life insurance premiums and pricing annuities.
- Yearly probability of living is another way of looking at the same data.

## Understanding the Yearly Probability Of Dying

Yearly probability of dying estimates are based on mortality tables (also known as actuarial or life tables), which reflect the percentage of people in a particular group who are statistically likely to die in a particular time period. Those percentages are derived by dividing the number of deaths in that group by the number of people who were alive at the beginning of the period.

For example, the mortality tables used by the Social Security Administration estimate that a 30-year-old male has a 0.001795 (or 0.18%) chance of dying within one year. For a 60-year-old, the odds rise to 0.011452 (1.1%), while a 119-year-old (which is as high as the table goes) faces odds of 0.879701, or 88%.

Mortality tables and yearly probability of dying calculations can add other variables, as well, with smoking vs. nonsmoking being a major one for life insurance and annuity contract purposes. They are also calculated using other variables such as education, income, and the specific cause of death, depending on what the researchers are studying.

One widely used set of mortality tables, particularly in the insurance industry, is the Commissioners Standard Ordinary (CSO) mortality tables, adopted by the National Association of Insurance Commissioners. The CSO tables differentiate mortality risk by age, sex, and tobacco use.

The probability of dying is frequently calculated using longer or shorter time frames than one year. For example, a common measure of child health in a given country is the under-five mortality rate (U5MR), which estimates the probability of a child dying between birth and age five. Maternal mortality rates are based on a period equal to the length of time the woman is pregnant or within 42 days of the end of pregnancy, based on the World Health Organization's definition.

#### Yearly Probability of Dying

## What Is the Yearly Probability of Living?

The yearly probability of living is basically the flip side of the yearly probability of dying. Also based on mortality tables, it is an estimate of the likelihood of an individual still being alive a year into the future, based on their age, sex, and sometimes other factors. Like the yearly probability of dying, it is widely used in the insurance industry. While a person's yearly probability of dying rises as they age, their yearly probability of living goes the opposite direction.

## What Is the Mortality Rate?

The mortality rate represents the number of deaths as a percentage of a total population in a given period, often one year. The most basic mortality rate, referred to as the "crude mortality rate" among statisticians, doesn't differentiate between men and women or according to other factors. More specialized types of mortality rates include age-specific mortality rates, sex-specific mortality rates, race-specific mortality rates, and cause-specific mortality rates, among others.

## What Is Life Expectancy?

Life expectancy is another use of mortality data, an estimate of how many more years a person with certain characteristics (current age, sex, and so forth) is likely to live or what age they are likely to attain before they die. Life expectancy estimates have many uses in the insurance industry and elsewhere.

For example, the Internal Revenue Service publishes life expectancy tables that taxpayers must use to determine their annual required minimum distributions (RMDs) from their retirement accounts. In its most recent tables, for example, a newborn has a life expectancy of another 84.6 years, while someone who is 120 or older (the top limit of the table) has a life expectancy of one more year.

## The Bottom Line

The yearly probability of dying is a statistical estimate of the likelihood of a person dying within a one-year period. It can cover an entire population or break down death rates according to age, sex, and other factors, such as tobacco use. The yearly probability of dying is widely used in health studies, by the government, and by the insurance industry. Other mortality-related statistics can use time periods shorter or longer than a single year.