4.1.1 Mortality Factor
Actuaries use the Commissioner's Standard Ordinary (CSO) Mortality Table to calculate the underlying factors and translate them into net single premium (amount needed today to fund the future benefit), net level premiums (premium payments over the number of years), and gross premiums (amount policyowner is required to pay after the addition of the expense factor). The primary purposes of a mortality table are to indicate the expectation of life at given ages - the average number of years remaining for a group of persons of the same age and the probability of death - the average number of deaths for a group of persons in given years. The CSO table is based on a large cross-section of people over a long period of time and provides the information needed to predict the insured's life longevity, premium payment years, and when the insurer will most likely have to pay out the policy's benefits.
Premium payments are made either annually, semi-annually, quarterly, or monthly.
