Hi guys Would like to understand how to decide how to add loadings to the standard tables for the different kinds of impairment. This came up in one of the questions in the April 2008 paper. When would one add a flat additional loading at all ages. A multiple of the standard rates at all ages. A decreasing loading to the standard rates. Please give an example and explain. I do not understand that solution for the exam.
This was a really tricky application-based question. You had to think hard about how the different loadings would affect mortality over time (i.e. as the life ages). A multiple of the standard rates at all ages would increase the death rate by the same amount at all ages, so would be appropriate for conditions that were expected to remain for a long time, maybe resulting in death later on in life. Hence, suitable for chronic conditions, such as diabetes. A flat additional loading at all ages would have a greater effect at younger ages (when standard mortality is lightest), but still apply (to a lesser extent) later on in life. So appropriate for fairly severe conditions, such as many cancers. A decreasing loading to the standard rates would clearly have most effect early on, so be suitable for conditions which will either result in death shortly, but for those that survive, not have so much impact on future mortality (“kill or cure” conditions, or folk that have just had organ transplants). There’s more details and help in the ASET solution. Needless to say that generally, this question wasn't done that well! Hope this helps. Best of luck.
