📊 The Commissioner’s Standard Industrial Mortality Table: A Linchpin in Life Insurance
Definition and Meaning
The Commissioner’s Standard Industrial Mortality Table is an actuarial tool used primarily within the life insurance industry to determine the nonforfeiture values owed to policyholders. This table provides standardized statistical data on mortality rates, giving insurers a basis for calculating the guaranteed minimum value that a policyholder is entitled to, should they decide to either surrender the policy or discontinue premium payments.
Etymology and Background
- Etymology: The term originates from the word “commissioner,” reflecting regulatory oversight, combined with “standard industrial mortality,” indicating statistical norms related to mortality within industrial life insurance.
- Background: Industrial life insurance, historically marketed to working-class populations, often includes policies with small face values and frequent premium payments. The table ensures fairness and standardization in determining policy termination values.
Key Takeaways
- Standardization: Ensures uniformity across the insurance industry, safeguarding policyholder rights.
- Fair Value: Helps in accurately assessing the nonforfeiture value, protecting policyholder benefits.
Differences and Similarities
Differences:
- VS Ordinary Life Mortality Tables: Unlike ordinary life mortality tables, which apply to standard life policies, the Commissioner’s Standard Industrial Mortality Table is tailored to industrial life insurance.
- Coverage Group: Targets industries and working-class demographics distinctly from broader populations.
Similarities:
- Actuarial Usage: Both apply rigorous actuarial science principles.
- Function: Used for computing expected indebtedness and policyholder benefits.
Synonyms
- Industrial Life Mortality Table
- Standard Mortality Rates Chart
Antonyms
- Ad Hoc Mortality Data
Related Terms with Definitions
- Nonforfeiture Value: The minimum guaranteed value available to the policyholder upon policy surrender.
- Actuarial Table: A table of statistical data used for calculations in insurance and pension.
Frequently Asked Questions
Q: What does the Commissioner’s Standard Industrial Mortality Table comprise?
A: It comprises age-specific mortality rates designed for industrial life insurance.
Q: How does it benefit policyholders?
A: It ensures policyholders receive a fair nonforfeiture value, enhancing trust in life insurance policies.
Exciting Facts
- Evolution: Reflects evolving data over decades, accounting for improved health standards and life expectancy.
- Basis for Innovation: Frequently updated to remain relevant, aiding the modernization of life insurance products.
Quotations from Notable Writers
- “Insurance is the honorable handshake between the uncertainties of life and the assurance of protection.” — Kenneth Blythe
Proverbs
- “It is not the mortality that matters but the fairness of return.”
Humorous Sayings
- “Turning mortal equations into happiness – one policy at a time!”
References and Literature
- Foundations of Insurance Economics by G. Dionne
- The Theory of Interest by Irving Fisher
Related Government Regulations
- NAIC Model Regulation: Pertains to updated usage standards for mortality tables.
- State Insurance Codes: Local statutes often incorporate or point to standardized mortality tables.
For Further Studies
- Textbooks: Actuarial Mathematics for Life Contingent Risks by D. Dickson et al.
- Journals: Articles in The Journal of Risk and Insurance
Farewell
Always endure the facts, as they lead you to fairness. May your understanding of life insurance be as stable and valuable as the nonforfeiture values you cherish within policies! — Kenneth Blythe
### What is the primary function of the Commissioner’s Standard Industrial Mortality Table?
- [x] To determine the nonforfeiture value owed to the policyholders
- [ ] To set premium rates for policyholders
- [ ] To allocate bonuses for insurance companies
- [ ] To define the life insurance policy clauses
> **Explanation:** The main purpose of the Commissioner’s Standard Industrial Mortality Table is to determine the nonforfeiture value – the guaranteed minimum that policyholders are entitled to if they surrender or discontinue their insurance policy.
### Which group is specifically targeted by the Commissioner’s Standard Industrial Mortality Table?
- [ ] Wealthy individuals
- [ ] Children
- [x] Working-class population under industrial life insurance
- [ ] Elderly requiring extended care insurance
> **Explanation:** The table is particularly tailored to life insurance policies targeting the working-class population often covered under industrial life insurance schemes.
### True or False: The table is only relevant for industrial life insurance policies.
- [x] True
- [ ] False
> **Explanation:** Correct. The Commissioner’s Standard Industrial Mortality Table is designed specifically for industrial life insurance policies.
### Which is a synonym for the Commissioner’s Standard Industrial Mortality Table?
- [x] Industrial Life Mortality Table
- [ ] Ad Hoc Mortality Data
- [ ] Ordinary Life Table
- [ ] Life Expectancy Chart
> **Explanation:** “Industrial Life Mortality Table” is another term used to refer to the Commissioner’s Standard Industrial Mortality Table.
### Identify what this table helps in:
- [ ] Calculating dividends for policyholders
- [x] Assessing nonforfeiture values
- [ ] Determining loan interest rates
- [ ] Setting new underwriting policies
> **Explanation:** The table primarily assists in determining nonforfeiture values, ensuring policyholders receive a fair market value for policy termination.
Inspirational Thought
“Even in numbers and tables, fairness ensures trust and security—a testament to our human need for assurance as grand as life itself.” — Kenneth Blythe
