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Effect of Period Mortality Tables on Life Insurance Premium Valuation

Abstract

Period mortality tables provide information on the mortality experience of a defined population during a particular period and are important tools in actuarial life insurance valuation. They provide age-specific probabilities of death and survival that can be used to estimate the expected timing of life insurance claims. The accuracy and suitability of period mortality tables are therefore important considerations in determining actuarial premium values and estimating the financial obligations associated with life insurance contracts. The study examines the effect of period mortality tables on life insurance premium valuation. It will assess how the mortality rates and survival probabilities contained in period mortality tables influence the calculation of life insurance premiums. The study will also examine the relationship between mortality assumptions, policyholder age, policy duration, benefit amounts, expected claim payments, and actuarial premium values. The study will focus on period mortality rates, survival probabilities, age-specific mortality, life insurance benefits, policy duration, interest rate assumptions, and actuarial premium valuation. Actuarial life table functions and premium valuation techniques will be applied to estimate premiums using period mortality assumptions. Comparative and sensitivity analyses will also be used to assess how changes in mortality rates across different periods influence estimated premium values. A quantitative research approach will be adopted for the study. Relevant mortality and life insurance data, including age-specific mortality rates, survival probabilities, policyholder ages, policy durations, benefit amounts, and interest rate assumptions, will be considered. Descriptive statistics, mortality analysis, actuarial present value calculations, premium valuation techniques, comparative analysis, and sensitivity analysis will be used to examine the effect of period mortality tables on life insurance premium valuation. The study is expected to show that period mortality tables can influence life insurance premium valuation because differences in mortality rates across periods may produce variations in expected claim payments. Higher mortality assumptions may result in higher estimated premiums for contracts providing death benefits, while lower mortality assumptions may reduce expected claim costs and premium requirements. The magnitude of the effect may depend on policyholder age, policy duration, benefit structure, mortality patterns, and interest rate assumptions. The study is expected to provide useful information for actuaries, life insurance companies, underwriters, product developers, and financial managers. The findings may support more appropriate mortality table selection, premium determination, product pricing, reserve estimation, and management of life insurance liabilities. The study may also assist insurers in assessing the implications of using mortality information from different observation periods in actuarial valuation. The study concludes that period mortality tables are an important component of life insurance premium valuation. It is therefore recommended that insurance companies carefully evaluate the suitability of period mortality tables, regularly review mortality experience, and apply sensitivity analysis to assess the effect of alternative mortality assumptions on premium values.

Keywords: Period mortality tables, life insurance premiums, premium valuation, mortality rates, survival probabilities, actuarial valuation, life insurance pricing, mortality assumptions, policyholder age, policy duration, expected claims, benefit payments, actuarial present value, life tables, actuarial analysis.