# Ultimate Mortality Table: What It Is and How It Works

![Ultimate Mortality Table](https://www.investopedia.com/thmb/0HCK0DhSP56eaBbkPYkY4B4ak8g=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/Term-Definitions_ultimate-mortality-table-Final-bd4d3d0c2d2e47f7bfb31fd03561edd4.jpg)

*Ultimate mortality tables help insurance companies price their policies and ensure financial stability. — Investopedia / Mira Norian*

> **Definition**
>
> An ultimate mortality table is a table that provides the percentage of life insurance policyholders expected to reach each age listed.

## What Is an Ultimate Mortality Table?

An ultimate mortality table shows how many [life insurance](https://www.investopedia.com/terms/l/lifeinsurance.asp) purchasers are expected to survive until each given age. A mortality table begins with age 0, representing 100% of the population, up to age 120. Typically, the data is based on a population of life insurance policyholders from either a particular [insurance](https://www.investopedia.com/terms/i/insurance.asp) company or group of companies, rather than an entire country's population.

### Key Takeaways

*   An ultimate mortality table shows the expected survival rates of life insurance policyholders.
*   Typically, the data is based on policyholders from a particular insurance company or group of them, rather than the entire U.S. population.
*   Ultimate mortality tables exclude data from recently underwritten policies because their owners were probably required to pass a medical exam.
*   Insurance companies consult ultimate mortality tables to price their products and determine whether to offer coverage to an applicant.

## Understanding Ultimate Mortality Tables

[Mortality tables](https://www.investopedia.com/terms/l/lifeexpectancy.asp) are essentially grids of numbers that show the probability of death for members of a given population within a defined period of time, based on a large number of factored variables.

What mainly separates an ultimate mortality table from other mortality tables is its exclusion of recently [underwritten](https://www.investopedia.com/terms/u/underwriting.asp) policies. The first few years of life insurance data is usually removed from the analysis to eliminate so-called selection effects. The rationale here is that people who just received life insurance will often have passed a medical exam and, as a result, should be statistically healthier and less likely to be on the brink of death than the rest of the general population.

### 1921

The year Raymond Pearl introduced the world to mortality tables for the purpose of furthering ecological studies.﻿﻿

The information underlying ultimate mortality tables is called survivorship data and takes into account many [risk](https://www.investopedia.com/terms/r/risk.asp) factors. Along with death and survival rates among age groups and sexes, mortality tables may also list survival and death rates in relation to weight, ethnicity, and region. Some break out statistics for smokers and non-smokers, too.

In addition, some might include an [aggregate mortality table](https://www.investopedia.com/terms/a/aggregate-mortality-table.asp), featuring death-rate data on the entire study population that has purchased life insurance, without a categorization based on age or time of purchase. The data in an aggregate table depends on the combined statistics of several, if not many, individual mortality tables.

## 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](https://www.investopedia.com/terms/b/beneficiary.asp) 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](https://www.investopedia.com/terms/p/profit.asp) of an insurance company.

> **Important**
>
> The profitability of insurance products partly hinges on companies accurately analyzing the data behind ultimate mortality tables.

To a lesser degree, [investment-management](https://www.investopedia.com/terms/i/investment-management.asp) 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](https://www.investopedia.com/terms/r/retirement.asp).

## Special Considerations

As 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](https://www.investopedia.com/terms/s/society-actuaries-soa.asp) (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.

> **Article Sources**
>
> 1.  David H. LaFever. "Encyclopedia of Ecology, Volume 3: Age-Class Models," Pages 215-218. Academic Press, 2019.
>     
> 2.  Society of Actuaries. "[Mortality and Other Rate Tables](https://mort.soa.org/)."