Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
38% - Moderately

Ultimate Mortality Table

Synonyms:exacting the probability of death, grim reaper's handbook, life-expectancy data, probabilities of dying, unbiased mortality table
Filed Under: insurance
Tags: actuarial, insurance

Definition of ultimate mortality table

ultimate mortality table
1. A mortality table that omits data from the first few years after an individual has been approved for a life insurance policy. Because of the health exams required prior to a life insurance application, those approved for life insurance policies are statistically healthier, and by extension less likely to die, than those from a random cross-section of people. Over time, the average heath of an individual approved for life insurance will normalize, but including data from those in the first few years of a life insurance policy will create a statistical selection bias, so to avoid skewing the data, they are omitted when making an ultimate mortality table.

Related Terms and Acronyms:

  • actuarial table   A table used in actuarial science that outlines the statistical probability that an individual of a specific age and sex will die within a year.
  • actuary   An individual who assesses the mechanisms, mathematics and complexities of risk and uncertainty.
  • incontestability clause   A clause that places a time limit on how long an insurer has to void a policy due to a policyholder's accidental misstatement in his or her life insurance application.
  • insurance score   A score used by those in the insurance industry to determine how likely a claim will need to be paid out for an individual or entity.
  • selection bias   A statistical error made when non-random data is added into a dataset.
  • self-selection bias   A selection bias that occurs when individuals join a sample group voluntarily.
  • survival analysis   A statistical analysis of how likely someone or something will survive to a set date.
  • yearly probability of dying   The likelihood that an individual of a certain age and gender will die within a year.
  • yearly probability of living   The likelihood that an individual of a certain age and gender will still be alive after a year has passed.

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