Ultimate Mortality Rate
In this paper I look at the financial materiality of misestimates in certain age groups. I tested 5 age groups, 60-69,70-79,80-89, 90-99 and 100+. I apply reductions in mortality to each of these age groups individually. I use the actuarial present value to estimate the materiality as this presents the expected present value of insurance benefits the insurance company has to pay. In addition, I use this analysis on 3 products, life insurance, payout annuities and Long-Term Care. In general, 100+ appears to be the least sensitive age group when using the IAM mortality table which I attribute to the fact so few people live to be 100 years old.
Best,
Matt