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The Selection of Lives
Published online by Cambridge University Press: 07 November 2014
Extract
Upon the selection of lives proposed for assurance depends, in no small degree, the measure of prosperity of a Life Assurance Company. So important is this selection that, considering the amount of attention given to other branches of actuarial science, it is rather surprising that in the past there has been a comparatively limited amount given by our profession to its study. Innumerable and valuable are the books and papers which have drawn information and lessons from our Tables of Mortality—Tables which form the foundation upon which the whole structure of Life Assurance is reared; but we need occasionally to be reminded that in reality those Tables themselves were based initially upon the selection of the individual life, and that consequently in our everyday work of selection we are consciously or unconsciously setting the standard of the great Mortality Tables of the future, which in their day will in turn vitally affect our business and its immense financial interests.
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- Copyright © Institute and Faculty of Actuaries 1921
References
page 131 note 1 Specific Gravity of Urine.—This is always asked for in a medical report, and for the benefit of the student it may be stated that the normal specific gravity for a healthy life may be regarded as ranging from 1015 to 1025 (distilled water being 1000). A low specific gravity, if constant, may possibly indicate a tendency to kidney disease, while a high specific gravity, if persistent, might indicate a tendency to diabetes.
page 141 note 1 For the benefit of those who desire to have an idea of what the excess mortality is likely to be in the case of heavy-weights, it may be said that, going by the American Experience, lives of 5 ft. 7 ins. to 5 ft. 10 ins., aged from 40 to 44, and weighing three stones above the average, may be expected to show a mortality ratio of about 140 per cent., i.e. an excess ratio of 40 per cent. In the Transactions of the Actuarial Society of America of May 1916, an American Actuary, Mr. A. A. Welch, suggests “an underwriting rule for over-weights something like the following: Divide the “pounds overweight by 7 and subtract 1. The result would be the number of “years which the age should be advanced, making no advance in age unless the “result is 3 or more.”