Main Menu Name: Chances
Determines the probability that at least one person in a group of up to ten persons will die before reaching a given age. It also computes survival probabilities based upon a given term. The calculation determines probability using Table 2000CM (the table used by the IRS for valuing annuities, life estates, and remainders).
In this article:
Although it is impossible to know the life expectancy of any one person, it is possible to estimate life expectancy or chances of survival to a given age based on a large number of individuals through actuarial tables.
Table 2000CM, the mortality table used by this calculation, is the table based on the 2000 census. The IRS uses this table to calculate life expectancy and the probability of survival at given ages. This table is the basis for the actuarial assumptions and tables released under Code Section 7520 in Notice 89-60.
Note that the expectancies in this table will usually not match those of annuity tables since those tables presume a more select (healthy and long-lived) group. For example, under Section 72 tables, a 65-year-old has a 20-year life expectancy while under the 1980 table life expectancy would only be about 16 years.
If the 1980 CSO Gender Adjustment is selected, then the probabilities are calculated by adding 2 years to the ages of males and subtracting 4 years from the ages of females. So, for example, if age 57 is entered for both a man and a woman, the probability of the man dying would be based on age 59 and the probability of the female dying would be based on age 53.
Table 2000CM, the mortality table used by this calculation, is the table based on the 2000 census. The IRS uses this table to calculate life expectancy and the probability of survival at given ages. The IRS uses this table to calculate life expectancy and the probability of survival at given ages.
The screen can calculate the approximate 1980 CSO sex-based mortality table probabilities, by applying the appropriate adjustment to the individual's age:
- Male adjustment: add two years
- Female adjustment: subtract four years
- Compute Survival Based on Term: Select the check box to calculate the probability of at least one of up to ten persons dying before they reach a specified reference age.
- Reference Age: Enter the reference age. This number is the age to which the probabilities of dying are calculated. This entry field appears when Compute Survival Based on Term is not selected.
- Reference Term: Enter the reference term. This number is the term for which the probabilities of dying are calculated. This entry field appears when Compute Survival Based on Term is selected.
- Apply 1980 CSO Gender Adjustment: Select the checkbox to approximate gender-based calculations based on the 1980 CSO mortality table age adjustments (adding two years for males and subtracting four years for females). Do not select the checkbox if you want to perform unisex calculations.
- Age: Enter the age of each person being evaluated. Use the age of this person as of the nearest birthday. Enter 0 for age of any person not to be included in the calculation.
- Gender: If the 1980 CSO gender adjustment is selected, then select the appropriate box for Male or Female for each person.
The Summary Tab displays each individual's probability of dying prior to the age specified in the Reference Age entry field. The program calculates results for up to ten individuals. The results also show the joint probability that at least one of the individuals will die before reaching the reference age.