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Mortality Rate

Mortality rate is a statistical measure that represents the frequency or probability of death within a specific population during a defined period of time. In insurance, it is a key actuarial factor used to determine life insurance premiums, reserves, and the expected financial risk to the insurer. Mortality rates are derived from large-scale data that reflect age, gender, health, lifestyle, and other risk factors, allowing insurers to predict how many people in a given group are likely to die each year.

The rate is typically expressed as the number of deaths per 1,000 individuals per year. Younger, healthier populations have lower mortality rates, while older populations or those with health risks have higher rates. These rates are continuously updated using national statistics and insurer data to ensure accurate premium pricing and long-term financial stability for life and group insurance products.

Example:

If the mortality rate for 40-year-old males in a population is 2 per 1,000, it means that, statistically, 2 out of every 1,000 men of that age are expected to die within one year. Insurers use this data to calculate the cost of life insurance coverage for that age group.

What to Watch For:

Mortality rates are averages and do not predict individual outcomes. Your actual life expectancy depends on personal factors such as health history, lifestyle, and occupation. Improvements in healthcare and lifestyle habits have contributed to steadily decreasing mortality rates in most developed countries, influencing how insurers price long-term products.

Related Terms

Major Restorative

Major restorative coverage includes complex dental procedures designed to restore the function and appearance of teeth. Examples include crowns, bridges, onlays, dentures, and sometimes implants. These treatments are more extensive and expensive than basic restorative services such as fillings.

Material Facts

Material facts are the pieces of information that are essential for an insurer to accurately assess risk and decide whether to approve an application, determine premiums, or apply exclusions. These facts include any details that could influence the insurer’s decision to issue coverage or the terms of that coverage. Examples include medical conditions, medications, family health history, lifestyle habits, and participation in hazardous activities.

Medical Condition

A medical condition refers to any illness, injury, disease, disorder, or ongoing health issue that affects a person’s physical or mental well-being. In the context of insurance, the term includes both acute and chronic conditions, whether diagnosed, treated, or undiagnosed at the time of application or claim. Examples include high blood pressure, diabetes, asthma, depression, or past surgeries.

Medical Emergency

A medical emergency is a sudden and unforeseen illness, injury, or medical condition that requires immediate medical attention to prevent serious harm, disability, or death. In the context of health and travel insurance, it refers to an unexpected situation where urgent care is needed while away from home or outside your province or territory of residence.

Medically Necessary

Medically necessary describes any service, treatment, or supply required to diagnose, treat, or manage a health condition, rather than for convenience, appearance, or personal preference. Insurers use this term to determine whether a claim qualifies for payment under your policy.

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