What does a mortality table in life insurance represent?

A mortality table in life insurance is a statistical chart that provides key information regarding the probability of death at various ages within a given population. This table is essential for actuarial calculations, as it indicates the likelihood that an individual of a certain age will die before reaching the next age, based on historical data and trends.

By using mortality tables, insurers can better assess the risk associated with issuing a life insurance policy to an applicant. This information allows them to calculate premiums more accurately, ensuring that they are both competitive and sustainable. The probabilities derived from these tables help insurance companies to manage their risk exposure effectively and to ensure that they have sufficient reserves to cover potential future claims.

While the other options provide information related to life insurance, they do not define what a mortality table specifically represents. The average age of policyholders does not directly relate to the probabilities of death. Expected returns on premiums are tied to overall financial performance rather than mortality rates. The number of claims filed annually is a distinct statistic that does not encapsulate the core function of a mortality table, which is primarily focused on mortality rates rather than claims data.