Actuarial Risk

Actuarial risk isn’t rocket science, but it’s close.

Think about actuarial risk like this: Nothing in life comes without risk. This is true of your latest (and hopefully not failed) skydiving attempt, and your life insurance policy. You see, the world’s propeller heads, otherwise known as actuaries, use a freaky little model to figure out your potential life expectancy, and your risk for death. When they’re right, insurance companies make money. When they’re wrong, they lose money.

Isn’t it fun to know that your lifespan is part of a science experiment?