how an ultimate mortality table is used
insurance companies use data from ultimate mortality tables to price their products and determine whether to offer coverage to an applicant life insurance guarantees a lump sum payment to named beneficiaries when the policyholder dies so studying the probability that an applicant might pass away during the period he or she seeks coverage for is essential to ensure the profitability of an insurance company the profitability of insurance products partly hinges on companies accurately analyzing the data behind ultimate mortality tables to a lesser degree investment management companies may also consult ultimate mortality tables to help their customers make determinations about their own respective life expectancies and how much money they might need in retirement special considerationsas is the case for other types of statistical data the accuracy of ultimate mortality tables depends on the breadth of data in the survey in other words an insurance company s ultimate mortality table may not be as precise as one compiled by an organization that s able to compile data sets from multiple insurers for instance the society of actuaries soa typically produces an ultimate mortality table each year that is based on a fairly wide data set it calculates mortalities for both men and women in the u s and also includes a blended table with the ultimate mortality of the entire u s population 2 