Mortality Risk

What Does Mortality Risk Mean?

Mortality risk refers to the financial risk an insurance company faces when an unexpectedly high number of its life insurance policyholders die before their projected lifespans.

Insuranceopedia Explains Mortality Risk

Actuaries employed by insurance companies use mortality tables to estimate the life expectancy of policyholders. These projections help determine the expected income from premiums relative to the payouts for death benefits or annuities. If a significant number of policyholders die earlier than expected, the insurer’s profits will be lower than anticipated.