Chartered Life Underwriter Exam 2025 – 400 Free Practice Questions to Pass the Exam

A mortality table plays a critical role in the life insurance industry by providing statistical data on the expected lifespans and probabilities of death at various ages of a population. This information is crucial for insurers as it helps them to accurately estimate the risk associated with insuring individuals. By understanding the likelihood of death for different demographics, insurers can calculate premiums that reflect the true cost of providing coverage and ensure they have adequate reserves to pay out claims.

The data derived from mortality tables allows insurers to set prices for policies that are competitive yet sustainable, balancing the premiums collected with the potential payouts for death claims. This statistical analysis is foundational for making informed decisions about risk management and financial planning within the insurance business.

In contrast, other options such as providing customer service data, tracking claims histories, or determining the average age of policyholders do not encompass the primary purpose of a mortality table. These functions serve different aspects of the insurance operation and do not utilize the predictive and statistical insights offered by mortality tables.