Legal Definitions - life table

A life table is a statistical tool used to estimate the probability of a person surviving to various ages, based on current mortality rates within a specific population. It presents a structured breakdown of how many people, out of a hypothetical starting group, are expected to be alive at each subsequent age. These tables are fundamental in fields requiring projections about human longevity and population dynamics.

Here are some examples of how life tables are applied:

• Life Insurance Premium Calculation: An insurance company is designing a new life insurance policy for individuals aged 35. To determine the appropriate premiums, the company's actuaries consult a life table. The table provides data on the statistical likelihood of a 35-year-old living to 45, 55, 65, and so on. This allows the insurer to assess the risk of having to pay out the policy at different stages of the insured's life, ensuring the premiums are set at a level that covers potential claims while remaining competitive.

• Pension Fund Management: A government agency manages a national pension fund that provides monthly payments to retirees. To ensure the fund remains solvent for future generations, its administrators use life tables to project how long current and future retirees are likely to live and receive benefits. By understanding these longevity trends, they can make informed decisions about contribution rates, investment strategies, and the overall financial health of the pension system.

• Wrongful Death or Personal Injury Lawsuits: In a legal case where a 50-year-old individual has suffered a catastrophic injury due to negligence, and the court needs to determine compensation for lost future earnings, a life table would be used. An expert witness, such as an economist or actuary, would refer to a life table to estimate the number of additional years the injured person would statistically have been expected to work and earn income. This projection helps the court calculate a fair and evidence-based amount for future economic damages.