Financial Planner needs help!!!

[jjordan]

Hi all

I would like to ask if someone could provide some assistance for me regarding mortality.

I am working on some modelling for financing options and need some help in this regard. I have one group of 100 people of which 55% are female and 45% are male. Above age 65, the number of females is slightly higher...say 60%. Here are the age ranges:

Average age 55 - 7 people
Average age 60 - 18 people
Average age 65 - 21 people
Average age 70 - 29 people
Average age 75 - 25 people.

For this group, I would need to know at what age is the mortality for each group. For example, for the age 60 group, 10 are female and 8 are male...what ages may I assume that each person will live to?

I also need a similar analysis done for 150 people with which 60% are female and 40% are male. The same assumptions may be used as the above table only that there are 50 more people.

This analysis should be based on Canadian mortality.

I really appreciate anyone's help in advance....

Regards,
John Jordan, CFP

[aces219]

You can download mortality tables from www.soa.org.

[jjordan]

I've done that but it hasn't helped me since I'm not very saavy with the tables...

[October]

A significant consideration is underwriting, which impacts mortality. I guess you could use a group table, which does not reflect underwritten lives, but does reflect actively-at-work lives, which may have different risk characteristics than your group. You may be able to get some data/tables from the state/federal on the general population.

Once you find the table, to determine the expected life for each individual, you could just take (1 * q_1) + (2 * p_1 * q_2) + (3 * p_1 * p_2 * q_3) + ..., where t is time, p_t is probability of surviving time period t, and q_t is probability of dieing in time period t. (Note that p_t = 1 - q_t.)

Also, other figures/statistics may be more useful than expected life span. You could take a "pricing" approach and calculate the present value of future benefits and solve for the present value of future premiums.

[Dr T Non-Fan]

I suggest hiring an expert. I don't think anyone here will help you for free.

[jjordan]

I'm only going to assume that the plans issued will be a standard rate. I'm looking for a starting point so I can start projecting scenarios.

[jjordan]

thanks for your support Dr. T but I didn't think this was really that big of a request....

[Dr T Non-Fan]

Well, I guess we'll find out how big it was.

I can't help, BTW. Sorry. Not my specialty.

[aces219]

Originally Posted by jjordan

thanks for your support Dr. T but I didn't think this was really that big of a request....

It doesn't seem like that big of a request, but figuring out which table to use and pulling the numbers off it would probably take me a half hour. That's $100, and that's at a pretty low billing rate.

A small piece of advice: use the probabilities and ages off the mortality table to calculate the expected value

[Dick the Bruiser]

Attained Age %Male %Female LifeExpect
0 45.0% 55.0% 77.6
1 45.0% 55.0% 76.7
2 45.0% 55.0% 75.7
3 45.0% 55.0% 74.7
4 45.0% 55.0% 73.7
5 45.0% 55.0% 72.7
6 45.0% 55.0% 71.7
7 45.0% 55.0% 70.7
8 45.0% 55.0% 69.7
9 45.0% 55.0% 68.7
10 45.0% 55.0% 67.7
11 45.0% 55.0% 66.7
12 45.0% 55.0% 65.7
13 45.0% 55.0% 64.8
14 45.0% 55.0% 63.8
15 45.0% 55.0% 62.8
16 45.0% 55.0% 61.8
17 45.0% 55.0% 60.8
18 45.0% 55.0% 59.8
19 45.0% 55.0% 58.8
20 45.0% 55.0% 57.8
21 45.0% 55.0% 56.8
22 45.0% 55.0% 55.9
23 45.0% 55.0% 54.9
24 45.0% 55.0% 53.9
25 45.0% 55.0% 52.9
26 45.0% 55.0% 51.9
27 45.0% 55.0% 50.9
28 45.0% 55.0% 50.0
29 45.0% 55.0% 49.0
30 45.0% 55.0% 48.0
31 45.0% 55.0% 47.0
32 45.0% 55.0% 46.0
33 45.0% 55.0% 45.1
34 45.0% 55.0% 44.1
35 45.0% 55.0% 43.1
36 45.0% 55.0% 42.1
37 45.0% 55.0% 41.2
38 45.0% 55.0% 40.2
39 45.0% 55.0% 39.2
40 45.0% 55.0% 38.3
41 45.0% 55.0% 37.3
42 45.0% 55.0% 36.3
43 45.0% 55.0% 35.4
44 45.0% 55.0% 34.4
45 45.0% 55.0% 33.4
46 45.0% 55.0% 32.5
47 45.0% 55.0% 31.5
48 45.0% 55.0% 30.6
49 45.0% 55.0% 29.6
50 45.0% 55.0% 28.7
51 45.0% 55.0% 27.7
52 45.0% 55.0% 26.8
53 45.0% 55.0% 25.8
54 45.0% 55.0% 24.9
55 45.0% 55.0% 24.0
56 44.5% 55.5% 23.1
57 44.0% 56.0% 22.1
58 43.5% 56.5% 21.2
59 43.0% 57.0% 20.3
60 42.5% 57.5% 19.4
61 42.0% 58.0% 18.5
62 41.5% 58.5% 17.7
63 41.0% 59.0% 16.8
64 40.5% 59.5% 15.9
65 40.0% 60.0% 15.1
66 40.0% 60.0% 14.3
67 40.0% 60.0% 13.5
68 40.0% 60.0% 12.6
69 40.0% 60.0% 11.9
70 40.0% 60.0% 11.1
71 40.0% 60.0% 10.3
72 40.0% 60.0% 9.6
73 40.0% 60.0% 8.9
74 40.0% 60.0% 8.2
75 40.0% 60.0% 7.5
76 40.0% 60.0% 6.9
77 40.0% 60.0% 6.3
78 40.0% 60.0% 5.7
79 40.0% 60.0% 5.1
80 40.0% 60.0% 4.6
81 40.0% 60.0% 4.1
82 40.0% 60.0% 3.6
83 40.0% 60.0% 3.2
84 40.0% 60.0% 2.8
85 40.0% 60.0% 2.5
86 40.0% 60.0% 2.1
87 40.0% 60.0% 1.9
88 40.0% 60.0% 1.6
89 40.0% 60.0% 1.4
90 40.0% 60.0% 1.2
91 40.0% 60.0% 1.0
92 40.0% 60.0% 0.9
93 40.0% 60.0% 0.8
94 40.0% 60.0% 0.7
95 40.0% 60.0% 0.7
96 40.0% 60.0% 0.6
97 40.0% 60.0% 0.6
98 40.0% 60.0% 0.5
99 40.0% 60.0% 0.5