Mortality Table (Sterbetafel)
A mortality table gives, for each age, the statistical probability of dying within one year, and serves as the basis for premium and reserve calculation in life insurance.
Concept
A mortality table is a statistical table that gives, for each age, the probability of dying within the following year, together with the resulting survival probability and average remaining life expectancy. It forms the central basis for the actuarial calculation of premiums, policy reserves, and present values of benefits in life and annuity insurance.
Types of Mortality Tables
A distinction is made in particular between period mortality tables, which reflect a population’s mortality at a specific point in time, and generational (cohort) mortality tables, which additionally account for the expected future trend of declining mortality (the longevity trend) over time; for calculating annuity insurance, insurers regularly use separate, more conservative mortality tables than for term life insurance, since longevity risk and mortality risk act in opposite directions.
Derivation and Regulatory Relevance
Mortality tables are either published by independent actuarial associations based on extensive population or insured-portfolio data, or derived by individual insurers on a company-specific basis using their own portfolio experience; the choice of an appropriate, sufficiently prudent mortality table is the responsibility of the appointed actuary and is regularly reviewed as part of the supervisory review of technical provisions.