The annual distribution amounts are based on
a standard life expectancy table.
Not exact matches
Suppose the insureds are the equivalent of one
table rating healthier than expected (about a 25 % lower multiplier applied to
standard mortality rates), and suppose the annual rate of mortality improvement is much higher than expected, leading to a
life expectancy of 92 months rather than 80 months and a mortality curve with a different shape.
Provided you are in good health, the Commissioner's Ordinary
Standard Table of
Life Expectancies, predicts you will
live to be around 87 or 88 years old.
Notably, the
life insurance maturity age of 100 exists primarily because the mortality
tables used for
life insurance during most of the 20th century (the Commissioners»
Standard Ordinary [CSO]
tables of 1941, 1958, and 1980) were all based on a maximum «terminal» age of 100 (i.e., there literally were no
life expectancy tables past age 100, as it was implicitly assumed «everyone» would be dead at that point!).
Specifically, the
standard approach to compiling
life tables and resulting
life expectancies at birth requires complete and accurate data on deaths that occur in a period, and an estimate of the population exposed to those deaths at the mid-point of the period.