A new paradigm of mortality modeling via individual vitality dynamics

TL;DR

This paper introduces a novel mortality modeling framework based on individual vitality dynamics, capturing complex mortality factors and enabling personalized survival analysis, with applications in insurance and lifetime decision-making.

Contribution

It presents a new vitality-based mortality model that integrates aging, randomness, and accidents, surpassing traditional models in flexibility and individualization.

Findings

Framework encompasses existing models

Provides individualized mortality outcomes

Offers insights into survival biases

Abstract

The significance of mortality modeling extends across multiple research areas, ranging from life insurance valuation to optimal lifetime decision-making. Existing approaches, such as mortality laws and factor-based models, often fall short in capturing the complexity of individual mortality, hindering their ability to address specific research needs. To overcome these limitations, this paper introduces a novel approach to mortality modeling centered on the dynamics of individual vitality. A four-component framework is developed to account for initial conditions, natural aging processes, stochastic fluctuations, and accidental events over an individual's lifetime. We demonstrate the framework's analytical capabilities across various settings and explore its practical implications in solving life insurance problems and deriving optimal lifetime decisions. Our results show that the proposed framework not only encompasses existing mortality models but also provides individualized mortality outcomes and offers an intuitive explanation for survival biases.