2 important Sources of Mortality Information

2 important Sources of Mortality Information

For construction of mortality table, number of living of the beginning of each age and the number of deaths during the age are required. The mortality table should be constructed to represent the past experience as accurately as possible.

So the figures of mortality construction should be as accurate as possible and based on a large number of persons. The sources of mortality construction can be obtained either from (i) population statistics, and (ii) records of life insurers.

1. Population Statistics :

The insurer gets number of living at each age from the census records and the number of deaths from municipal and other death records. The population statistics will reveal how many persons have died at what age.

So, with the radix of total number of persons at the beginning, it can be calculated how many died in a particularly age. The calculation of mortality table on this basis is not very easy and correct.

Criticism :

The population statistics is not very much useful to insurers. It was applied only when there was no insurance experience in this field.

(i) The accuracy of population statistics is doubtful in absence of age-proof. There has been over- estimation or under-estimation in several cases. Sometimes, members of a certain section of society are unaware of ages.

(ii) It has been also noticed that some deaths are unrecorded. It is difficult to know exactly how many deaths are unrecorded and similarly. It is also difficult to know exactly how many deaths occurred a particular age.

(iii) Census figures are available only after 10 years and therefore, it would not be very recent figure. A particular census figure may be biased with the abnormality of the year.

(iv) Interpolation and extrapolation are involved and correct figures are generally not known.

(v) The population statistics will give statistics of all types’ persons without any separation while the insurer requires mortality of only insurable lives. Mortality for standard and substandard lives are required separately.

2. Records of Insurers :

The records of insurer give a correct figure because the death rates can be correctly recorded. No death will go unrecorded, correct number of persons living and dead for each age can be known. Collection of figures is done from the records of as many insurers as possible in large numbers but is not more than 10 years covering, favorable and favorable years.

Generally 10-year period may be quite sufficient. The abnormal years are excluded from the sample. Separate mortality tables may be prepared for standard lives, sub-standard lives, female and male lives. Sub-classification according to sex, marital status, occupation, geographical area, class may be made and tables are constructed separately.

The counting of persons is done very cautiously, withdraw and causation are excluded. Persons included for calculation caused exposed to risk. If the calculation starts at the withdrawal from this number is excluded.

Year wise aggregation of number of deaths and number of loving persons is done from the information of all insurers. Mortality rate at every age will be counted by dividing the number of expired lives by number of exposed lives.