What Is a Select Mortality Table?

A Select Mortality Table is a type of actuarial tool used in life insurance and pension planning to estimate mortality rates for individuals based on both their attained age and the number of years since policy underwriting or selection. Unlike an ultimate mortality table, which assumes the insured population is fully blended without recent selection effects, a select table takes into account the early years after a person has purchased insurance, during which their mortality risk tends to be lower due to the underwriting process.

Select mortality tables are critical for pricing insurance products, projecting reserves, and understanding how mortality risk evolves over time, particularly in the years immediately following policy issuance.

Purpose and Role in Insurance

The main purpose of a select mortality table is to provide actuaries with more accurate mortality assumptions in the early years of a life insurance contract. When individuals apply for life insurance, they typically go through an underwriting process. This process involves medical exams, questionnaires, and sometimes lab tests. People who are found to be in good health and are approved for coverage tend to have lower mortality risk, at least for a few years after the policy is issued. This phenomenon is referred to as selection.

A select mortality table captures this by presenting mortality rates that vary by both age and duration since underwriting. For example, a table may show lower mortality rates for a 40-year-old in their first year after policy issuance than for a 40-year-old in their fifth year post-issuance. This reflects the diminishing effect of selection as time passes.

This makes select tables particularly useful when an insurance company needs to:

• Price term and permanent life insurance products,
• Set aside reserves for policies in force,
• Evaluate profitability and persistency trends, or
• Comply with regulatory reporting standards.

Structure of a Select Mortality Table

A select mortality table typically includes two components:

1. Select Period Rates: These are mortality rates applicable during the initial years after underwriting, usually for the first 3 to 5 years, sometimes longer. The duration is noted in years, such as "duration 0" for the first policy year, "duration 1" for the second year, and so on.
2. Ultimate Rates: Once the select period ends, the mortality rates revert to those found in a standard mortality table that applies uniformly by attained age, regardless of underwriting date. These are called ultimate rates because they represent the long-term mortality experience of the population.

As a result, a select mortality table is often displayed in a two-dimensional format. One axis represents the attained age, and the other represents the number of years since policy issuance or underwriting. After the select period, the table transitions to a single dimension based only on age.

Example and Application

Suppose an insurer uses a select mortality table that covers a 5-year select period. For a male age 35 at the time of policy issuance:

• Select Period:
• • At age 35, duration 0: 0.0008 probability of death
  • At age 36, duration 1: 0.0009
  • At age 37, duration 2: 0.0011
  • At age 38, duration 3: 0.0014
  • At age 39, duration 4: 0.0018
• Ultimate Period:
• • At age 40 and beyond: The rates follow the ultimate mortality table, with no further adjustment based on the underwriting date.

In this way, the select table more accurately models mortality in the early policy years and transitions to a more generalized assumption afterward.

Differences from Ultimate Mortality Tables

The key difference between select and ultimate mortality tables is the consideration of selection effects. An ultimate mortality table assumes the selection effect has completely worn off. Everyone at a given age, regardless of when they were underwritten or insured, is assumed to face the same mortality risk.

In contrast, a select mortality table explicitly models the short-term advantage that newly underwritten individuals have due to their recent health screening. Over time, this advantage diminishes as health naturally deteriorates and the population of insured individuals becomes more heterogeneous.

Actuaries use select tables when the timing of policy issuance is relevant — such as in new business projections, reserve calculations for early policy years, and experience studies of newly underwritten blocks of business.

Regulatory and Industry Use

Select mortality tables are used in regulatory contexts, especially in the U.S. insurance industry. The National Association of Insurance Commissioners (NAIC) has adopted select tables for statutory reserve calculations, such as in the Commissioners Standard Ordinary (CSO) tables.

For example, the 2017 CSO Mortality Table includes both a select and ultimate component, with a 25-year select period, to reflect improvements in mortality as well as selection effects. Insurers are required to use such tables in determining the minimum reserves and policyholder values for certain types of life insurance contracts.

The Bottom Line

A Select Mortality Table is a foundational tool in actuarial science and insurance modeling. By accounting for both age and time since underwriting, it reflects the real-world pattern that individuals recently evaluated for insurance tend to have lower mortality risks. As time passes, this selection advantage fades, and mortality rates converge to more typical levels.

For life insurers, the use of select mortality tables enables more precise pricing, better reserve adequacy, and a deeper understanding of mortality patterns within insured populations. These tables play an essential role in financial reporting, regulatory compliance, and product development across the life insurance industry.