Actuarial tables are statistical tables that show, for each age, the probability a person will die within the next year and the average number of years they can expect to keep living. Insurance companies use them to price life insurance and annuities. Pension funds use them to decide how much money to set aside. The IRS uses them to value future property interests and to size the withdrawals you must take from retirement accounts. Courts use them to calculate damages in injury and wrongful death cases. If you carry a life insurance policy, participate in a pension, hold a traditional IRA or 401(k), or plan a charitable remainder gift, the numbers in these tables are quietly shaping your money.
What the Numbers Actually Show
A mortality table tracks two figures for every age. The first is the probability that someone that age dies within the next year. The second is life expectancy, meaning the average number of additional years a person that age can expect to live. Life expectancy is an average, not a guarantee. Roughly half the population outlives it and half doesn’t, which is why financial planners treat the figure as a starting point.
Actuaries build the tables from large datasets, primarily census records and death certificates. The raw numbers are smoothed to strip out random fluctuations and then organized so that pricing formulas and funding calculations can plug the probabilities in directly.
Period Tables and Cohort Tables
Two main types 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 stay constant going forward. It’s a snapshot of current mortality. A cohort table follows a group born in the same year and projects how their death rates will fall as medical and public health improvements continue, so it projects longer lifespans than a period table.
The difference matters for any obligation stretching decades ahead. A pension fund relying on a period table where a cohort table would be more accurate can systematically underestimate how long its retirees will live and end up underfunded.
Life Insurance and Annuity Premiums
Life insurance is the most intuitive 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 will likely pay out. The insurer takes the death probabilities from the table, calculates the present value of the future death benefit, layers in the investment return it expects on premiums, and adds operating costs and margin. That’s the premium you’re quoted. Higher mortality risk at a given age means a higher premium.
Annuities run 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, and the insurer uses mortality tables to estimate how many years it will keep sending checks. Longer projected lifespans mean smaller monthly payments for the same upfront investment, because the money has to stretch further.
Required Minimum Distributions From Retirement Accounts
This is where most people encounter actuarial tables without realizing it. 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.
The size of each year’s RMD depends on your account balance and a life expectancy factor pulled from IRS actuarial 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, for example, 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.
Pension Funding Rules
Defined benefit pension funds face a version of longevity risk that runs into billions of dollars. The plan promises retirees a specific monthly payment for life, so it needs to estimate how long each retiree will collect and set aside enough to cover the payments. Missing the mortality assumption by even a year or two on average leaves a fund materially short.
Federal law addresses this directly. Under the Internal Revenue Code, the Secretary of the Treasury prescribes the 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, not just historical data.
For the 2026 plan year, the IRS issued updated static mortality tables through Notice 2025-40. They apply to calculations of funding targets and other items for valuation dates during 2026. The notice also provides a modified unisex version, blending 50 percent male and 50 percent female mortality rates, for calculating the minimum present value of certain pension distributions.
IRS Valuations Under Section 7520
When someone transfers property in a way that splits it into present and future interests, such as giving a family member the right to live in a house for life with the remainder passing to a charity, the IRS needs a way to assign a dollar value to each piece. 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.
In practice, 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. That rate matters because higher rates increase the present value assigned to the income interest and decrease the value of the remainder, while lower rates do the opposite.
The planning consequences are real. For charitable remainder trusts and other split-interest gifts, the size of the charitable deduction depends directly on the actuarial value of the remainder interest. Donors making these gifts 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 most favorable tax result.
Damages in Injury and Wrongful Death Cases
In personal injury and wrongful death litigation, actuarial tables provide 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 meaningfully change the damages figure, which is why opposing experts frequently disagree on which table fits a given plaintiff.
When Gender Can and Can’t Be Used
Women live longer than men on average, and actuarial tables reflect that gap. Whether insurers and plan administrators can use the statistical difference to charge different prices or pay different benefits depends on the context.
For employer-sponsored retirement plans, the answer is no. 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 if the tables accurately predict women’s longer average lifespan. The Court ruled that the statute 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 the beneficiary’s sex.
Private insurance runs on different rules. In most states, life insurers and annuity providers can and do 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 insurance products, and the European Union banned gender-based insurance pricing entirely in 2012, but the practice remains standard in most of the U.S. individual insurance market.