The Effects of Mortality by Socioeconomic Category on Group Life Insurance Rates and Plan Designs in the United States

Recent life tables provided by the Society of Actuaries demonstrate mortality rate estimates for the United States by year from 1982 through 2018, separated by socioeconomic deciles and quintiles. These estimates were utilized to determine how life insurance rates might vary based on the socioeconomic category of a specific United States county. The aim of this study is to determine how the data provided in these life tables can be utilized to curate life insurance rates and plan designs for employees at a specific company in the United States. The results indicate that there are significant differences in mortality across these socioeconomic quintiles, including greater life expectancy for individuals located in counties of a higher quintile. While there are no limits to the implications of these results in the insurance industry, this report highlights how the demographics of individuals working for a specific company could potentially alter life insurance rates for its employees.