Basic Concepts of Demography

KEY WORDS 

1 Average age Size of population .

2 Generation mortality table Selection table Mortality table. 

3 Life expectancy at birth Probability of death Probability of survival Life table.

4 Disability adjusted life expectancy Age structure Life expectancy.

In order for insurance to be of help in the planning of the life cycle, the insurer must have concrete ideas and specific models in mind regarding the path of human life cycles and their most important parameters. (For example, their average length, the ratio of active and inactive stages, their distribution, the probability of death, illness, accidents, the expected extent of illness or injury from accidents, etc.)

1.  This information is usually obtained from public sources, which are mostly collected as a part of a separate social science, demography (the science of populations.) In the following sections we will get to know some demographical concepts and implications that are important with respect to insurance. 

2. One might think that the equilibrium between births and deaths can be achieved if every single person has one offspring (or every couple has two), because this would reproduce the population. This is true in the 

3. Here, in the last few decades, every married couple in the city is allowed only one child, while couples from rural areas – if the first child is female - are allowed up to two children. 

4. This means that for decades the number of children for every couple has been well below two, and yet during this time the population has increased by several hundred million, and, according to forecasts, this will continue for a few more decades (while the policies regarding children will probably not change significantly).

5. We can also gain more detailed information about the population than just its total size and its changes. It is important to know, for example, how the total population is distributed among the sexes and age groups.