Modeling Human Longevity and Life Tables

Abstract

Up to this point in the book, I have assumed a great fiction, namely that human longevity is known and finite. The success or failure of a retirement income plan was monitored and measured until a finite, e.g. 30 year, horizon. This chapter is the first to focus on the uncertainty or randomness in human longevity versus portfolio longevity. It begins with a detailed description and analysis of (historical) cohort life tables from the Human Mortality Database. The cohort life tables are used to extract population survival and death rates, which are then used to reconstruct life tables. The chapter concludes with a high-level discussion of mortality projections and improvements for future birth cohorts. The main emphasis is on gaining familiarity with the basic atomic structure (q _x) of actuarial life-science.