Life Expectancies Comparison for Life Equity

Cynthia Haas


There is an industry which purchases whole life policies from individuals who no longer seek protection from debts or providing financial support for others after death. That industry usually offers a price above the surrender value of the policy, yet expects the individual will expire relatively soon resulting in a financial gain. Life Equity is a small company offering to purchase such policies. As a smaller company, they rely on third party underwriter’s life expectancies reports to determine the valuation for a individual policy on which to offer a purchase price. The objective of the project is to determine statistically which of these if these third party reports reflect a financial gain for Life Equity. Currently, Life Equity uses underwriter reports from AVS, 21st Services, EMSI (which is now LSI), and Fasano and Associates. Using statistical analysis form 5000 purchases, this paper will instruct Equity Life which third party underwriter reports provided maximum profits.