Posted in Finance, Accounting and Economics Terms, Total Reads: 313
Definition: Mortality Table
A mortality table is a table that depicts the rate of deaths that occur in a well defined population for a selected time interval or the probability of survival from the birth to reaching a given age. It shows the probability, of a person of a given age, of dying before reaching his/her next birthday. It basically shows the survivorship of people belonging to a certain population.
A mortality table is also referred as “life table”, “actuarial table” or “morbidity table”.
These mortality tables help in determining the prices that are paid by the people who have purchased life insurances in the recent past.
These mortality tables are generally constructed separately for male and female population. Other than that, mortality tables can also include different characteristics like smoking, occupational hazards, socio-economic status etc. Some tables even take into account the relationship between longevity and weight of a person.
There are two types of life tables:
• Static Life Tables
• Cohort Life Tables
The Static Life Table shows the probability of death for the people falling in different age groups in the current year. On the other hand, the Cohort Life Table shows the probability of death, of people who have shared a particular event (usually the birth year), over the course of their entire lifetime.