Mortality Risk
Updated: 29 February 2024
What Does Mortality Risk Mean?
Mortality risk is the risk that an insurance company can suffer financially because too many of their life insurance policyholders die before their expected lifespans.
Insuranceopedia Explains Mortality Risk
Actuaries working for insurance companies rely on mortality tables to make informed assumptions about how long their policyholders will live. With these estimates, they can get an idea of how much they will earn in premiums compared to how much they will pay out in death benefits or annuitization. If a fair number of their policyholders die well before their life expectancy, the insurer will make less profit than anticipated.
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