Glossary

Actuary

A specialist who uses statistics, mortality data and financial math to price policies, set reserves and measure an insurer's long-term risk.

An actuary is a professional who measures financial risk using probability, statistics and economic assumptions. In life insurance, actuaries estimate how many policyholders will die at each age, how many will let their policies lapse, and what the insurer's investments will earn. Those estimates drive premiums, the cash values in permanent policies and the reserves an insurer must hold.

In the U.S., most life actuaries earn credentials from the Society of Actuaries through a long series of exams, first as an Associate (ASA) and then as a Fellow (FSA). Signing a statement of actuarial opinion also requires meeting the qualification standards of the American Academy of Actuaries. Each life insurer has an appointed actuary who reports to state regulators every year on whether its reserves are adequate.

Actuaries are not the same as underwriters: actuaries build the pricing tables, while underwriters decide which rate class an individual applicant fits. When a company raises cost-of-insurance charges or cuts a dividend scale, the decision rests on actuarial assumptions about mortality, interest rates and lapses. For the job itself, see careers in life insurance: agents, underwriters and actuaries; for how actuarial work shows up in your bill, see how life insurance premiums are calculated.

Last reviewed October 4, 2026

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Related terms

Mortality table A chart showing, for each age, the probability of dying within a year and often the expected remaining lifetime, used to price and reserve for life insurance. Reserves Liabilities a life insurer must hold on its balance sheet, as required by state law, to cover future claims and benefits owed on policies in force. CSO mortality table The table of death rates state regulators adopt as the minimum standard for life insurance reserves, guaranteed values and tax-law tests. Mortality rate The share of people of a given age expected to die within a year, often shown as deaths per 1,000; it is the foundation of life insurance pricing. Underwriter The insurance company professional who evaluates an application's risk and decides whether to approve it, in which rate class, or to decline it.

Related guides

Careers in life insurance: agents, underwriters and actuaries What life insurance agents, underwriters and actuaries do, what they earn and how each job is changing, from the Bureau of Labor Statistics' 2026 outlook. How life insurance premiums are calculated Insurers price life insurance from expected claims, investment earnings, expenses and lapses, then adjust for your age, health and policy type. Jobs in life insurance: hiring, layoffs and automation Where life insurance jobs are shrinking or growing and how automation is changing underwriting, claims and sales, using BLS and industry survey data. Mortality trends and how they move life insurance prices Life insurance prices follow expected death rates. What CDC and SSA data show about U.S. mortality, and why insured-population trends move prices slowly. Principle-based reserving and what it means for prices How principle-based reserving (VM-20) replaced formula reserves for new life policies from 2020, and why its effect on your premiums is indirect.