Essay On Predicting Mortality

Literature Review
Over the years mortality has been a major factor in predicting and planning development regarding a population. Mortality rate is defined as measure of deaths on a large scale per unit time. Mortality is used in all areas of life prediction such as demography, business, finance and insurance. The models of predicting mortality has evolved over time and has various formulae and methods.
Mortality has now become a more sought after topic due to the habit changes adopted by lots of middle –age persons in order to prolong their life span hence they live longer to earn more annuities than before. Though some infant mortality is inevitable, decline in infectious diseases in babies and toddlers by vaccines and immunization increases

For the sake of clarity, we will use the following conventions. The term mortality risk should be taken to encompass all forms of uncertainty in future mortality rates, including increases and decreases in the rates. Longevity risk should be interpreted as uncertainty in the long-term trend in mortality rates and its impact on the long-term probability of survival of an individual. Longevity risk is normally taken to mean the risk that survival rates are higher than anticipated, although we strictly take it to mean uncertainty in either direction. Whereas, catastrophic mortality risk should be interpreted as the risk that, over short periods of time, mortality rates are much higher (or lower) than would normally be experienced. Examples of such "catastrophes" include the influenza pandemic in 1918, world war in 1945 and the tsunami in December 2004. Once the catastrophe has past, we expect mortality rates to revert to their previous levels and to continue along previous

Lee Carter method was proposed by Ronald D. Lee and Lawrence Carter in 1992 which forecasted mortality using data from United States of America. The model has been used by the United States Social Security Administration, the US Census Bureau and the United Nations. It has become the most widely used mortality forecasting technique in the world today. The Lee Carter mortality model has been adopted by various organizations and countries for making projections. The formulae for the Lee Carter model is expressed