First Year's Risk

Extract

A correct measure of the Rate of Mortality in the First Year of Assurance is of considerable value. It enables the actuary to calculate the limit to which initial expense may grow without incurring the risk of loss through lapse at the end of the first year ; while its more obvious purpose is to estimate the immediate effect of the Selection by offices through their medical examinations and restrictive rules. In the first year we see the full force of the skill of medical officers pitted against the desire on the part of the lives assured to make their best appearance. We need not suggest that they try to deceive the doctor, but it is often necessary for him to apply tactful cross-questioning in order to elicit important information.