Individuals insured by some large life insurance policies may face a surprisingly high risk of death due to non-medical causes such as accidents or suicides.
Milliman Inc., Seattle, has published that finding in a summary of results from the Milliman Industry Mortality Study and Analysis (MIMSA).
The study includes mortality and lapse information from 29 insurers, and it includes data on 1.6 million deaths and 8.1 million lapses that occurred from 2000 to 2009.
Overall mortality was only 87% of the expected rate, but there was a large range of results from company to company for both mortality and lapse, Milliman says.
Insurers have assumed that their life largest policies would have the best mortality experience, but Milliman found that, in some cases, because of the high risk of accidents and suicides, those policies had the worst mortality experience.
The overall lapse rate was 4.5%, and lapse rates for level-term products were about twice as high as the lapse rates for universal life products with secondary guarantees.
- Allison Bell