What is the expected proportion of lives assured that is likely to develop a serious illness within the next 12 months called?

The expected proportion of lives assured that is likely to develop a serious illness within the next 12 months is referred to as the morbidity rate. This term specifically quantifies the incidence or occurrence of illness or disability in a given population over a specified time period, in this case, one year. The morbidity rate is essential for insurance companies as it helps them assess risk and set premiums for health and critical illness insurance policies.

The morbidity rate reflects the likelihood of loss of health or well-being among policyholders and is crucial for actuarial calculations that ensure the financial stability of life assurance products. Understanding morbidity allows insurers to predict potential claims and manage their reserves effectively.

Other terms like mortality rate pertain to death rather than illness, while systematic rate and selection rate are more about underwriting processes and overall population assessments instead of specific health outcomes. Hence, the focus on morbidity is appropriate for assessing serious illness likelihood.