What is the purpose of a mortality table?

The purpose of a mortality table is to predict how many individuals within a specific age group are likely to die within a set period of time. Mortality tables, also known as life tables, provide statistical data that reflect the death rates of a population at various ages. This information is invaluable in the insurance industry because it helps actuaries assess risk and develop pricing structures for life insurance policies.

Understanding mortality rates allows insurers to establish premiums based on the expected life span of policyholders, which is critical for maintaining the sustainability of life insurance products. By accurately predicting mortality trends, insurance companies can better manage their reserves and ensure they can meet the policyholder's claims in the future.