Description: This is the abstract of a paper that presents a model for examining the effect of various relationships between mortality rates and lapse rates on the mortality experience of a cohort of insured lives. It takes an individual approach rather than the aggregate approach used in traditional methods of analyzing selective lapsation. The model assumes that insured lives are healthy at policy issue, but may later move to an impaired state from which the lapse rate is zero. Associated with each insured is an unobservable 'risk level' random variable, which reflects the heterogeneity of the insured group. Individual mortality and lapse rates are functions of the risk level. A numerical illustration provides some interesting results obtained using this model.

Description: This is an abstract of a 1998 presentation from the 33rd Annual Actuarial Research Conference that introduces a family of fractional age assumptions and discusses its usefulness in estimating mortality rates and calculating actuarial present values. Members of the family include the familiar uniform distribution of deaths, constant force, and Balducci assumptions.