Life Expectancy

age to which an average person can be expected to live, as calculated by an actuary. Insurance companies base their projections of benefit payouts on actuarial studies of such factors as sex, heredity, and health habits and base their rates on actuarial analysis. Life expectancy can be calculated at birth or at some other age and generally varies according to age. Thus, all persons at birth might have an average life expectancy of 80 years and all persons aged 40 years might have an average life expectancy of 85 years.

Life expectancy projections determine such matters as the ages when an Individual Retirement Account may start and finish withdrawing funds. Annuities payable for lifetimes are usually based on separate male or female tables, except that a qualified plan or trust must use unisex tables.