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In general, the main responsibility of a life actuary is to calculate the probability that a certain incident can happen to an individual and compute the cost it can produce. Most incidents are accidents and diseases. In this way, actuaries come up with relatively accurate statistical rates of fatalities, disabilities, and sicknesses.
Once the statistics are available, the life actuary then computes for the price of a certain insurance policy for the beneficiary. These policies vary according to the client’s needs, desires, and situation. Insurance companies need actuaries to calculate probabilities in order to ensure their insurance policies can safely cover clients. At the same time, companies want to guarantee they still can make some profits.
Aside from accidental and natural casualties and deaths, calculating for risks in disasters and unemployment may be included in the tasks of a life actuary. These factors are also important in computing for insurance policy rates. Sometimes, even a client's job is included as a variable when calculating the risk factors. Generally, when people have high-risk jobs, such as pilots and firefighters, their insurance policies are more expensive than those with low-risk jobs, such as an office personnel or a stay-at-home parent. A life actuary can also play a significant role in creating investment and savings plans, which are beneficial for an individual or a family in the future.
Being a life actuary requires some specialized skills and knowledge. Most, if not all, actuaries are graduates with college degrees related to mathematics, statistics or business administration. They should also pass several actuarial exams to qualify for a position. Aside from their mathematical skills, life actuaries should also be knowledgeable about economic trends, as this will be an important element in all statistical data. Insurance companies also deal with many legal technicalities that actuaries should be aware of, so a background in law education may also be an advantage.
Life insurance actuaries are very valuable because their expertise in numbers and statistics helps provide the clients financial coverage for any unexpected events in their lives. Companies also consider actuaries assets because not everyone possesses their very specialized skills. In fact, a 2010 research study crowned the actuary as the best job in the US. For someone who likes to make sense of the world through numbers, being an actuary can be a fulfilling vocation. With many economic trends requiring analysis, the demand for a life actuary may increase.