Basic Mortality Table

Updated: 19 January 2025

What Does Basic Mortality Table Mean?

A basic mortality table is a tool used by life insurance companies to assess the probability that a person will die within the next year. The probability derived from this table can significantly impact insurance rates and premiums. Generally, the higher the likelihood of death, the higher the premiums tend to be.

Insuranceopedia Explains Basic Mortality Table

Basic mortality tables are created using complex mathematical formulas, often developed by actuaries—professionals trained in statistical calculations. It is crucial for life insurance companies to get these equations right, as incorrect pricing of insurance products can result in financial losses. In the worst-case scenario, this could lead to a loss of profitability, potentially causing the insurer to go bankrupt.

Related Reading

Go back to top