Life Table - Ending A Mortality Table

Ending A Mortality Table

In practice, it is useful to have an ultimate age associated with a mortality table. Once the ultimate age is reached, the mortality rate is assumed to be 1.000. This age may be the point at which life insurance benefits are paid to a survivor or annuity payments cease.

Four methods can be used to end mortality tables:

• The Forced Method: Select an ultimate age and set the mortality rate at that age equal to 1.000 without any changes to other mortality rates. This creates a discontinuity at the ultimate age compared to the penultimate and prior ages.
• The Blended Method: Select an ultimate age and blend the rates from some earlier age to dovetail smoothly into 1.000 at the ultimate age.
• The Pattern Method: Let the pattern of mortality continue until the rate approaches or hits 1.000 and set that as the ultimate age.
• The Less-Than-One Method: This is a variation on the Forced Method. The ultimate mortality rate is set equal to the expected mortality at a selected ultimate age, rather 1.000 as in the Forced Method. This rate will be less than 1.000.