Actuarial Life Table

Key takeaways

• An actuarial life table (also called a mortality table or life table) shows the probability that a person of a given age will die before their next birthday and related survival statistics.
• Insurers use life tables to estimate remaining life expectancy, set premiums, and project future insured events.
• Two main types exist: period life tables (time‑specific snapshots) and cohort life tables (follow a birth cohort over its lifetime).
• Tables are typically computed separately by sex and can be adjusted for risk factors (smoking, occupation, socioeconomic status, etc.) using predictive models.

What it is

An actuarial life table summarizes the pattern of mortality for a population. For each age it typically reports:
* Probability of dying before the next birthday (qx)
Probability of surviving the year (px)
Expected remaining lifetime at that age (life expectancy)

These statistics let analysts estimate the chance someone will survive to a given age or the expected number of remaining years.

How it works and how insurers use them

Life insurers and pension analysts use actuarial life tables to:
* Price life insurance and annuities.
Project the timing and frequency of death, disability, or other insured events.
Calculate reserves and funding needs for pensions.

Modern actuarial practice uses computerized predictive modeling to adjust base tables for subgroups and risk factors—such as smoking status, occupation, medical conditions, or socioeconomic indicators—producing tailored mortality assumptions for underwriting and pricing.

Types of life tables

• Period life table: Records mortality rates for a specific calendar period and population. It provides a snapshot of mortality at that time, useful for comparing rates across time or populations.
• Cohort (generation) life table: Tracks or models mortality for people born in the same interval across their lifetimes. Cohort tables attempt to incorporate expected changes in mortality over time (e.g., improvements in healthcare) and are often preferred when projecting lifetime outcomes.

Note: Historical or record-based tables can undercount infant mortality and may misstate early-age rates if records are incomplete.

Other applications

Beyond insurance and pensions, life tables are used in:
* Public policy (e.g., social security and demographic planning)
Epidemiology and public-health research
Biology and ecology (studying survival patterns in species)
* Product lifecycle and workforce planning (long-term forecasting)

Brief FAQs

Q: How are tables adjusted for individual risk?
A: Actuaries apply rating factors or predictive models to base tables to reflect individual differences (health, behavior, occupation, etc.).

Q: Why separate tables by sex?
A: Men and women generally exhibit different mortality patterns and life expectancies, so separate tables yield more accurate estimates.

Q: Which table is better—period or cohort?
A: It depends on the purpose. Period tables are useful for current snapshots; cohort tables are better for lifetime projections when future mortality improvements are expected.

Conclusion

Actuarial life tables are foundational tools for measuring and projecting mortality. By quantifying age‑specific death and survival probabilities—and by allowing adjustments for demographic and behavioral risk factors—they enable insurers, policymakers, and researchers to make informed decisions about pricing, funding, and planning over time.