On the Influence of Selection on the Mortality from different Classes of Diseases amongst Assured Lives

Extract

Upon the selection of lives depends to a large extent the financial success of a life assurance company, as the acceptance of under-average risks at ordinary rates may be as prejudicial to the well-being of an office as an imprudent investment of its funds. The opposition of interests also suggests the necessity for caution, and calls for the constant exercise of sound judgment. The care taken by life offices to exclude inferior risks, invariably has the effect of reducing the number of deaths in the early years of assurance considerably below those indicated in the tables upon which their calculations are based. The extent and duration of this favourable influence have been repeatedly investigated, and the subject is now well understood. In this paper it is proposed to extend the enquiry to the partial death-rates from various classes of diseases, and thus to ascertain the strength of this self-protecting power in different directions. A somewhat wider meaning will be attached to the term “selection” in the following pages than has usually been associated with it by actuarial writers. It will be regarded as including not only the effects of the medical examination, but also those other selecting causes which impart to the mortality of assured lives the characteristics it is seen to possess when compared with that of the general population.