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JMO Fan 08-29-2003 10:42 AM

Disabled Life Reserves for Waiver of Premium
From the Desert (waiver is usually regulated as life insurance, so I post it here rather than the health-disability thread)


We are currently using the 1952 Disability Study - Period 2 for our disabled life (waiver of premium) reserves. Is this still the statutory standard, or is there a more up-to-date table? Can anyone comment on the table, as to whether the rates are too high, low, whatever?

Reply From: David Hippen

The 1952 Disability Study - Period 2 for disabled life (waiver of premium) reserves is still the common statutory standard, as far as I know. Most states probably accept 1980 CSO as the accompanying mortality assumption, although 1958 CSO might still be the minimum in the law.
Any comments?

Double High C 08-29-2003 12:53 PM


1. When he talks about 1958/1980 CSO being used, he must mean for Active Life reserves, as the mortality rate for the disableds is embedded in the double decrement termination rates (the other decrement being recovery, of course). As for Active Lives, I don't see why you cannot use 1980 CSO; in fact, I believe that there are published SOA "monetary tables" with these; I believe that it is clear, whether implicitly or explicitly, that you can in fact use (reserves consistent with) these tables (and hence, 1980 CSO).

2. The termination rates are likely too low, because the life expectancy upon disability for a given insured has almost certainly increased; IIRC, disability insurance valuation assumptions/tables have also increased, e.g. from 1964 CGT? to the 1985? 1987? table. (Having said that, it is not clear that the active lives reserves are not overly conservative, as the probabilities of becoming disabled may have decreased significantly, though I am not aware of a study on this.)

urysohn 08-31-2003 09:27 PM

Whether or not it should be updated is the wrong question. The correct question is "Should the SOA conduct a study to determine whether or not the table is still appropriate, and if not then proceed to update the values?" And the answer would be absolutely. I've asked the question about why we're still using a '52 table a number of times and the response is "the rates wouldn't have changed much". That's nice to postulate, but it should still be looked into once every, oh, fifty years or so.

Horatio Dimwitty 12-17-2014 01:19 PM

Thanks for these responses (way back when)!

Are people still using 1952 Disability? What mortality should be used?

kazh 09-11-2019 06:46 PM

:bump: 1952 Disability Tables are old enough to retire. :crazy:

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