Valuation Mortality Table

What Does Valuation Mortality Table Mean?

A valuation mortality table is a statistical tool used by insurance companies to calculate cash surrender values and statutory reserves for life insurance policies. Generally, a mortality table shows death rates at specific ages, indicating the number of deaths per 1,000 individuals at each age. It also predicts the likelihood of a person of a given age living for a certain number of years. Insurance companies rely on these tables to assess risk and determine the financial obligations associated with each policy.

Insuranceopedia Explains Valuation Mortality Table

A valuation mortality table often includes a safety margin to protect insurers. This margin helps determine the amount insurers are legally required to set aside for future claims and benefits, known as the legal reserve.