Some arguments in favor of assuming higher mortality (Blumsohn points out
that using the 1990 ordinary mortality table, in effect, does this since
mortality has improved in the last decade):
1. General health may be adversely affected by whatever caused the
2. Side effects of medications, etc. needed to stabilize condition.
Arguments in favor of lower mortality:
1. Regular medical care.
2. Less high-risk behavior.
Or does it depend upon circumstances? There's some evidence that for
Occupational Disease claimants, mortality is higher for those who develop
the disease early and lower for those who develop it late. It also
depends, of course, on the nature of the disability. Blumsohn also
up the interesting point that Robin Gillam, who did study disabled lives
mortality, did not dollar-weight claims, and that the more expensive
may have higher mortality because they are more severe.
There are high stakes in this for casualty actuaries- particularly in the
areas of Workers' Comp. and unlimited PIP claims. I'd be interested to
hear what other actuaries think.
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