Every few years, a technical document quietly influences billions of dollars in life insurance, superannuation, and pensions across Australia. It’s the Ultimate Mortality Table – a tool that underpins how actuaries, insurers, and government agencies assess longevity risk. In 2025, as Australians live longer and financial products evolve, understanding the Ultimate Mortality Table is more relevant than ever.
What Is the Ultimate Mortality Table?
The Ultimate Mortality Table is a statistical chart that estimates the probability of death for people at each age. It’s compiled using national population data, insurance claims, and longevity trends, updated periodically by actuaries and the Australian Prudential Regulation Authority (APRA). These tables are ‘ultimate’ because they reflect long-term, steady-state mortality rates, filtering out short-term shocks like pandemics or natural disasters.
- Purpose: To set pricing for life insurance, annuities, and superannuation products.
- Scope: Used by insurers, pension funds, and policymakers for risk management and reserve calculations.
- 2025 Update: The latest table incorporates post-COVID longevity improvements and factors in changing demographics, such as the ageing baby boomer cohort.
Why the 2025 Ultimate Mortality Table Matters
Mortality tables are more than actuarial curiosities. They directly impact:
- Life Insurance Premiums: When the probability of death at each age falls, insurers may reduce premiums for certain age brackets, or tighten underwriting in response to unexpected trends.
- Superannuation Payouts: Longer life expectancies mean retirees need to stretch their savings further. The 2025 table reflects incremental gains in longevity, pressuring super funds to reconsider drawdown strategies and pension adequacy.
- Financial Planning: Advisors use these tables to model how long clients’ money needs to last. Overestimating mortality can lead to under-saving, while underestimating it risks outliving one’s nest egg.
For example, the 2025 table shows that a 65-year-old male now has an average life expectancy of 86, up from 84 in the previous release. This seemingly small shift ripples across billions in retirement planning.
How Mortality Tables Are Used in Practice
Let’s break down how the Ultimate Mortality Table influences different sectors:
1. Life Insurance
Insurers use the table to project expected claim rates. If mortality improves, they may offer more competitive premiums or enhanced benefits. In 2025, some Australian life insurers have launched new products with built-in longevity guarantees, directly informed by updated mortality assumptions.
2. Superannuation Funds
Super funds rely on mortality tables to calculate required reserves for lifetime pensions. With the latest data, many are reviewing their default drawdown rates and annuity pricing. Some funds now offer longevity insurance add-ons, recognising that retirees could live well into their 90s.
3. Government Policy & Regulation
APRA and the Australian Bureau of Statistics (ABS) use mortality data to forecast age pension liabilities and national healthcare costs. The 2025 table feeds into the Intergenerational Report, shaping policy debates on retirement age and pension sustainability.
2025 Trends and Policy Changes Affecting Mortality Tables
- Post-Pandemic Longevity: While COVID-19 caused a temporary spike in mortality, the 2025 table confirms a return to long-term improvement trends, thanks to medical advances and healthier lifestyles.
- Genetic and Lifestyle Data: Insurers are increasingly supplementing the standard table with personalised risk assessments, using wearable data and family history.
- Regulatory Updates: APRA’s 2024-2025 guidelines require insurers to stress-test products against adverse mortality scenarios, increasing consumer protection.
Real-world example: In 2025, an Australian insurer introduced a policy offering reduced premiums to non-smokers and those who participate in regular health monitoring, leveraging both the general table and individualised risk data.
What Should Australians Do?
Understanding the implications of the Ultimate Mortality Table empowers you to make smarter choices about your life insurance, superannuation, and retirement strategy. Ask your adviser how recent longevity trends affect your financial plan and whether your current products are optimised for a longer life.
