Morbidity Tables and Disability Rate Assumptions

Morbidity Table Construction

Morbidity tables quantify the rates at which people become sick, disabled, or require medical care. Unlike mortality tables that track a single event (death), morbidity tables must capture incidence rates, recovery rates, and duration of disability. The SOA publishes standard tables such as the 2012 Individual Disability Insurance (IDI) valuation table, which provides claim incidence and termination rates by age, gender, occupation class, and benefit period.

Key Assumptions in Disability Pricing

Disability insurance pricing requires assumptions for incidence (the probability of becoming disabled), continuance (how long claims last), and benefit offsets (reductions from other income sources). Elimination period selection significantly affects both incidence and continuance rates. Occupation class is among the strongest predictors, with white-collar workers experiencing lower incidence but potentially longer claim durations than manual laborers.