Morbidity is the rate at which disease occurs in a group of people over a given period of time.
Morbidity rates are often used by actuaries to price certain insurance policies, including life insurance, health insurance, and long-term care insurance.
Many diseases can trigger an insurance payout. For example, an insurer may have to pay health insurance benefits to a policyholder who becomes sick and requires medical attention, and a terminal disease might lead to the payment of a death benefit. Insurers, therefore, use morbidity rates to determine the likelihood that they will have to pay out a claim and price their premiums to offset this insurance risk.
A morbidity table is one of the tools commonly used to calculate morbidity rates.
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