One simple method to adjust for a shorter-than-average actual life expectancy, if desirable, is to use mortality factors for an age that is older than the seller’s actual age. For example, assume the actual life expectancy of a 60-year-old seller is only about 5 years, due to some health problem such as an advanced heart condition. An inspection of Table V shows that a normal 90-year-old person has a life expectancy of 5 years. The mortality factors for a 90-year-old person could be used to determine the risk premium by simply entering age 90, rather than age 60, as the age of the seller.
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