American Experience Table

What Does American Experience Table Mean?

The American Experience Table was a nineteenth-century precursor to the Commissioner’s Standard Ordinary Table (CSO). It assisted insurance companies in evaluating underwriting risks by providing data on the life expectancy rates of individuals within specific age ranges.

Insuranceopedia Explains American Experience Table

The American Experience Table analyzed data from a sample of 100,000 individuals in a specific age group. By tracking how many of them died in a given year, life insurance companies could estimate the death benefits they would need to pay out annually. Because life expectancy data directly shapes how insurers price coverage, the same kind of mortality analysis pioneered by the American Experience Table still helps explain what factors impact the cost of your life insurance premium today.

While insurance companies still use mortality tables to assess the risk of insuring policyholders, they now prefer more sophisticated and comprehensive models. These newer models are one reason rates vary so much between carriers, which is why it helps to look at the average cost of life insurance before settling on a policy.