Expectation of Life
Definition - What does Expectation of Life mean?
Expectation of life refers to the number of years a person is expected to live, based on mortality table calculations.
Expectation of life calculations are often used in life insurance to assess the risk of issuing a policy to an applicant.
Insuranceopedia explains Expectation of Life
The fewer years that a person is expected to have left in life, the higher the perceived risk of insuring them. Life insurance companies have to pay large death benefits when their policyholders die, and they must weigh this expense against the amount they are likely to receive in premium payments.
There are a number of things that can reduce of person's expectation of life, including advanced age, a family history of heart disease, and unhealthy habits such as smoking.
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