Kathmandu. The Insurance Board, the regulatory body of insurance companies, has started preparations to update the mortality rate table of the insured after 22 years. The Board has interacted with the reinsurance and underwriting department heads of all life insurance companies on Friday to update the mortality rate schedule of the insured issued for the first time in 2066 BS.
At a program organized at Hotel Greenwich Village in Lalitpur, the actuaries of Insurance Board informed about the mortality rate table. Information has also been shared about the use of mortality table in determining insurance risk and premium.
The Board had earlier collected the details of death claims of all the 19 life insurance companies to update the Mortality Rate Table in 2075 BS. Although the Board had collected details including age, gender, cause of death, type of insurance of the insured, the table was not updated.
Before the Nepalese Insured’s Mortality Rate 2066 came into force, Nepalese life insurance companies had been using the mortality rate table of India or other countries. Based on the mortality table, the probability of death of the insured at a certain age is assessed.
In reinsurance, when a company enters into a reinsurance agreement, the mortality rate of the country concerned is also included in the risk assessment with priority. In addition, the insurer uses the such table as the major basis for determining the insurance premium rate. The mortality rate table covers the probability of death of the insured at any age from birth to the age of 99 years.
The mortality table estimates the probable number of deaths per 1,000 insured at a certain age. As a person gets older, the risk of death due to natural causes, diseases or accidents, occupational risks also increases. Therefore, insurance premiums for older people are also more expensive than others.
Mortality rates are classified on the basis of age, gender, geography, professional background, educational qualifications, hereditary health status of the particular community, alcoholism, smoking habits, body weight, etc. Insured involved in hazardous occupations, including pilot , security guards and soldiers serving in the war, are more likely to die than those insured in general service or business. The mortality table helps to project the remaining age of a person of a certain age in addition to the mortality rate.
