What is the impact of improved mortality on insurance pricing?

Improved mortality typically leads to a decrease in insurance premiums. When life expectancy increases due to better health outcomes, advancements in medical science, and lifestyle changes, the risk associated with life insurance policies diminishes. Insurers base their premiums on the likelihood of a policyholder dying within a certain period. As improved mortality means that people are living longer and healthier lives, the probability of payouts decreases. Consequently, insurance companies can afford to lower premiums to remain competitive while still ensuring they cover their potential liabilities. This adjustment is vital for attracting new customers and maintaining the overall affordability of insurance products in the market.