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Minimum improvements

\ˈmɪnəməm\ \ɪmˈpruvmənts\

A minimum level of ongoing mortality improvements assumed to take place in the future.

Some projections for future improvements (i.e. reductions) in mortality rates (or increases in longevity) assume that these reductions will transition rather rapidly to zero. This incorporates the concept of there being a biological limit to life. Many actuaries have questioned whether we are close to any such limit and often make an allowance for some minimum level of continued year-on-year reductions in mortality rates. Such a minimum can be considered as the level of reductions in mortality sustainable by ongoing medical and health care advances.

The simplest form of minimum improvements is when the same rate of reduction is applied at all ages, for example annual reductions in mortality rates of 1%. However, since mortality rates at the very oldest ages do not seem to be falling as rapidly as at younger ages, some actuaries prefer to adopt a sliding scale with lower improvements at older ages.

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