* Cohort table: For each period the mortality table
depends both on age and on time, resulting in a different mortality table
for each age cohort.
When payout rates for income annuities are released with the new mortality tables
, you will see the payout rates drop because of an adjustment in longevity credits.
The SOA published an updated payout annuity table in 2012 called the 2012 Individual Annuity Mortality Table
, or IAM Table for short.
The final death blow to STOLI came in the fall of 2008, when, as previously mentioned, two of the dominant life expectancy underwriters adopted new mortality tables
and increased their life expectancies by some 25 to 30 percent.
Despite the considerable variations in the various mortality tables
, it would seem that these markets are attractive.
For example, if the plan had used higher interest rates or a mortality table
with shorter life expectancies to determine the annuity amount, then the amount that exceeded the benefit derived would have been subject to the nonforfeiture rules and would have been included in the employee's annual benefit.
But the revisions in the mortality table
changed that equation - at least for many eligible retirees hired before 1996, known as "tier one" employees.
The Plenary Committee adopted several changes needed to implement the ACLI's proposals regarding the use of preferred mortality tables
for any product covered by the 2001 CSO mortality tables
(Most term plans are exempt because the required formulas generate no cash values for them.) It requires calculations to be made on specified mortality tables
and interest rates.
1, 2009, the companies would need to reprice products using the new 2001 mortality tables
. Many companies waited until the last minute to roll out 2001 CSO products, which resulted in a challenge to their distribution channels, which were now required to learn a new product overnight.
As a result, preneed insurance policies issued on or after January 1, 2009, and before January 1, 2012 can use the 2001 CSO Mortality tables
that lists different mortality rates for men and women to determine the minimum standard for reserves and nonforfeiture benefits.