Ultimate Mortality Table

Definition

• A mortality table that omits data from the first few years after an individual has been approved for a life insurance policy. Because of the health exams required prior to a life insurance application, those approved for life insurance policies are statistically healthier, and by extension less likely to die, than those from a random cross-section of people. Over time, the average heath of an individual approved for life insurance will normalize, but including data from those in the first few years of a life insurance policy will create a statistical selection bias, so to avoid skewing the data, they are omitted when making an ultimate mortality table.

Synonyms
life-expectancy data, probabilities of dying, grim reaper's handbook, exacting the probability of death, unbiased mortality table

Related Terms and Acronyms

• Actuarial Table — Definition,
  • A table used in actuarial science that outlines the statistical probability that an individual of a specific age and sex will die within a year.
• Actuary — Definition,
  • An individual who assesses the mechanisms, mathematics and complexities of risk and uncertainty.
• Incontestability Clause — Definition,
  • A clause that places a time limit on how long an insurer has to void a policy due to a policyholder's accidental misstatement in his or her life insurance application.
• Insurance Score — Definition,
  • A score used by those in the insurance industry to determine how likely a claim will need to be paid out for an individual or entity.
• Selection Bias — Definition,
  • A statistical error made when non-random data is added into a dataset.
• Self-Selection Bias — Definition,
  • A selection bias that occurs when individuals join a sample group voluntarily.
• Survival Analysis — Definition,
  • A statistical analysis of how likely someone or something will survive to a set date.
• Yearly Probability of Dying — Definition,
  • The likelihood that an individual of a certain age and gender will die within a year.
• Yearly Probability of Living — Definition,
  • The likelihood that an individual of a certain age and gender will still be alive after a year has passed.