Basic Mortality Table

What Does Basic Mortality Table Mean?

A basic mortality table is a tool that life insurance companies use to analyze the probability that a person will die in the next year. The probability that comes up when a person is analyzed with a basic mortality table can dramatically impact insurance rates and premiums. The more likely the person is to die, the higher the premiums generally tend to be

Insuranceopedia Explains Basic Mortality Table

Basic mortality tables are created with the use of complex mathematical formulas. These tables are commonly created by actuaries, who are people with training to make these types of intense statistical calculations. It is very important for life insurance companies to get these equations correct, because if not, then they could price their insurance products incorrectly. That could lead to a loss of profitability, which, in a worst case scenario could cause an insurer to go bankrupt.