Actuarial tables are statistical charts that estimate, for every age, the probability a person will die in the coming year and the average number of years they can expect to live. Insurance companies use them to price life insurance and annuities. Pension funds use them to figure out how much money to set aside. The IRS uses them to value future property interests and to set the size of your required withdrawals from retirement accounts. Courts use them to calculate damages in wrongful death cases. If you own a life insurance policy, contribute to a 401(k), receive a pension, or expect to inherit a retirement account, the numbers in these tables are quietly shaping the dollar figures around you.
What the Tables Actually Contain
A mortality table lists two numbers for every age: the probability that someone that age dies within the next year, and the average number of years someone that age can expect to live. Life expectancy is a statistical average, so roughly half the population outlives it and half doesn’t. That’s why financial planners treat it as a starting point, not a promise.
The tables are built from large datasets, mainly census records and death certificates. Actuaries smooth the raw numbers to remove random fluctuations and format them so they drop directly into pricing formulas and funding calculations.
Period Tables and Cohort Tables
The two main types of mortality tables differ in how they treat the future. A period table uses death rates observed over a recent short window, usually one to three years, and assumes those rates hold steady going forward. It’s a snapshot.
A cohort table follows a group of people born in the same year and projects how their death rates will fall as medical care and public health continue to improve. Because cohort tables build in expected mortality improvements, they project longer lifespans than period tables do. That gap matters for any obligation running decades into the future. A pension fund using a period table when a cohort table would fit better can systematically underestimate how long its retirees will live, and end up underfunded.
The Social Security Administration publishes both types. Its period life tables, drawn from the mortality experience of the entire U.S. population, are among the most commonly referenced public longevity datasets.
Life Insurance and Annuity Prices
Life insurance is the most direct use. An insurer needs to know the probability that a 40-year-old policyholder dies during the policy term, because that probability drives what the company expects to pay out. Higher mortality risk at a given age means a higher premium. The insurer takes the table’s death probabilities, calculates the present value of the future death benefit, layers in the investment returns it expects to earn on premiums, and adds operating costs and margin. That’s your quoted premium.
Annuities run in the opposite direction. Instead of insuring against dying too soon, an annuity insures against living too long. You pay a lump sum in exchange for periodic payments, often for life. The insurer uses mortality tables to estimate how many years it will need to keep sending checks. Longer projected lifespans translate into smaller monthly payments for the same upfront investment, because the money has to stretch further.
Required Minimum Distributions
This is where most people bump into actuarial tables without noticing. If you have a traditional IRA, 401(k), or similar tax-deferred retirement account, federal law requires you to start taking minimum withdrawals, called required minimum distributions, generally by April 1 of the year after you turn 73.
Each year’s RMD depends on your account balance and a life expectancy factor pulled from IRS tables. The IRS publishes three:
- The Uniform Lifetime Table is the default for most account owners calculating their own RMDs, including unmarried owners and married owners whose spouse is not more than 10 years younger.
- The Joint Life and Last Survivor Table applies when your spouse is both the sole beneficiary and more than 10 years younger than you. It produces a longer life expectancy factor, which means a smaller required withdrawal.
- The Single Life Expectancy Table is used by non-spouse beneficiaries who inherit a retirement account.
The math is straightforward. Divide your account balance on December 31 of the prior year by the distribution period from the applicable table. A 75-year-old using the Uniform Lifetime Table has a distribution period of roughly 24.6 years, so the RMD on a $500,000 account would be about $20,325. Miss the deadline and the IRS imposes a steep excise tax on the amount you should have withdrawn but didn’t.
IRS Valuations of Life Estates and Remainder Interests
When someone transfers property in a way that splits present and future interests, such as giving a family member the right to live in a house for life with the remainder going to a charity, the IRS needs a way to put a dollar value on each piece. The Section 7520 tables do that work.
Federal law requires the value of any annuity, life estate, remainder interest, or reversionary interest to be determined using tables prescribed by the Treasury Secretary, combined with an interest rate equal to 120 percent of the federal midterm rate for the month of the valuation, rounded to the nearest two-tenths of one percent. The statute also requires the tables to be updated at least every 10 years to reflect current mortality data.
You multiply the fair market value of the property by the actuarial factor for the beneficiary’s age found in the IRS tables. For 2026, the Section 7520 rate has ranged from 4.6 percent to 4.8 percent in the first several months of the year. Higher rates raise the present value assigned to the income interest and lower the value of the remainder; lower rates do the reverse.
That has real planning consequences. For charitable remainder trusts and other split-interest gifts, the charitable deduction depends directly on the actuarial value of the remainder interest. Donors can elect to use the Section 7520 rate from either of the two months preceding the transfer, which offers some flexibility to pick the rate that produces the better tax result.
Wrongful Death and Personal Injury Damages
In personal injury and wrongful death cases, actuarial tables set the framework for calculating financial damages. An economic expert starts with the injured or deceased person’s age, then uses mortality and work-life expectancy tables to project how many more years that person would have earned income. The expert applies a discount rate to convert that future earnings stream into a present-value lump sum, which becomes the basis for the damages claim.
The tables used in litigation are not always the ones insurers use. Courts and experts often rely on population-wide life tables or specialized work-life expectancy tables that account for labor force participation patterns. The choice of table can move the damages figure meaningfully, which is why opposing experts often disagree on which table fits a given plaintiff.
Whether Gender Can Change Your Numbers
Women live longer than men on average, and mortality tables reflect that gap. Whether insurers and plan administrators can use the difference to charge different prices or pay different benefits depends on the setting.
For employer-sponsored retirement plans, they can’t. The Supreme Court held in 1983 that using sex-segregated actuarial tables to calculate retirement benefits violates Title VII of the Civil Rights Act, even when the tables accurately predict women’s longer average lifespan. The Court ruled that Title VII prohibits class-based treatment: the fact that women as a group live longer does not justify paying an individual woman a lower monthly pension benefit. All retirement benefits derived from contributions made after that decision must be calculated without regard to sex.
Private insurance runs on different rules. In most states, life insurers and annuity providers use gender-distinct mortality tables when pricing individual policies. Women generally pay less for life insurance because their mortality risk is lower, but receive smaller annuity payments per dollar invested because their expected payout period is longer. A handful of states prohibit gender as a rating factor for certain products, and the European Union banned gender-based insurance pricing entirely in 2012, but gender pricing remains standard across most of the U.S. individual insurance market.
Pensions and Social Security
Pension funds face longevity risk that can run into billions of dollars. A defined benefit pension promises retirees a specific monthly payment for life, so the fund has to estimate how long each retiree will collect and reserve enough to cover it. Getting the mortality assumption wrong by even a year or two on average can leave a fund significantly short.
Federal law addresses this directly. Under the Internal Revenue Code, the Secretary of the Treasury prescribes specific mortality tables that single-employer defined benefit plans must use when calculating funding obligations. The statute requires those tables to reflect the actual mortality experience of pension plan participants and to incorporate projected trends rather than historical data alone.
Social Security operates on the same demographic logic at a larger scale. The Social Security Administration maintains its own actuarial tables and uses them to project the long-term financial health of the Old-Age and Survivors Insurance and Disability Insurance trust funds. The annual Trustees Report relies on those projections, including assumptions about future mortality improvement, to estimate whether the program can keep paying full benefits under current law. When life expectancy rises faster than projected, the trust funds owe more than originally estimated, which is one of the factors behind the program’s long-term funding gap. Those actuarial projections don’t set your individual benefit the way IRS tables set your RMD, but they shape the policy debate about Social Security’s future.