Actuarial Cost Assumptions

Actuarial Cost Assumptions

The assumptions an actuary makes when calculating the cost of providing insurance or a pension. Actuarial cost assumptions include the expected benefit of the policy or pension, the age at which the pensioner is expected to retire, and the return on investment on the premiums the pensioner makes, among other things. As with all assumptions, actuarial cost assumptions may turn out to be wrong; this would result in an actuarial adjustment.