An actuarial life table is a table or spreadsheet that shows the probability of a person at a certain age dying before their next birthday. It is used often by life insurance companies. An actuarial life table is also called a mortality table, life table, or actuarial table.
These two tables are used together to calculate one's premium... which always works out to the advantage of the insurance company.
If life insurance companies can convince couples in their 20's, especially those with children that a life insurance policy or more than one is necessary and that policy is renewable for the next 40 years, then the life insurance company is destined to make a TON OF MONEY just off that one person... now, multiply those potential profits by ONE MILLION... by TEN MILLION...
Of course, once the person who is insured becomes vested or whatever the word is that indicates payment in full in mandatory should the subject die... and that person does in fact die, then the life insurance company has to pay out a TON OF MONEY... now multiply that LOSS by One Million or by Ten Million...
When one buys life insurance one is betting that one is going to die EARLY so that the least amount of money is paid in for the most amount of money paid out... otherwise, the insurer is SIMPLY BEING STUPID...
If a family invests that same amount of money... that is to say that premium amount paid to a life insurance company... into a mutual fund and does not remove that money over the course of one's lifetime, one will have several hundreds of thousands of dollars in that mutual fund account...
The only downside to this strategy is if one DOES IN FACT DIE EARLY...
A Mutual Fund over a 20 year period of time can typically generate an annual rate of return from between 8-12% and sometimes higher but hardly ever lower although that is possible too... but, when we had the financial downturn in 2008 but 2016 all of the money that had been lost had been regained and then some.
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