Construction and Application and Use of Life Tables

Life Estate Valuation

1.0: Preface

Life Estate is (law) an estate whose duration is limited to the life of the person holding it. A tenant whose legal right to retain possession of buildings or lands lasts as long as they (or some other person) live.

Annuity

Income from capital investment paid in a series of regular payments. Annuitant is the recipient of an annuity. (Word web Dictionary).

(Law dictionary)

The right to use or occupy real property for one's life. Often this is given to a person (such as a family member) by deed or as a gift under a will with the idea that a younger person would then take the property upon the death of the one who receives the life estate. Title may also return to the person giving or deeding the property or to his/her surviving children or descendants upon the death of the life tenant-this is called "reversion." Example of creation of a life estate: "I grant to my mother, Molly McCree, the right to live in and/or receive rents from said real property, until her death," or "I give my daughter, Sadie Hawkins, said real property, subject to a life estate to my mother, Molly McCree." This means a woman's mother, Molly, gets to live in the house until she dies, then the woman's daughter, Sadie, will own the property.

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Life estate is a unique type of partial Interest. In this form of estate, a designated beneficiary, the life tenant, has the right to use and occupy a parcel of real estate for the duration of his or her life. The life tenant generally enjoys this right without any obligation to pay rent, but typically he or she must maintain the property and pay all applicable liens and taxes The owner of a real property encumbered by a life estate Is called the remainder man; he or she enjoys the remaining rights to the properly
once the life tenant is deceased. Valuation tables in 'Excel' is attached▲:

Compounding and Discounting Tables (Tables 1A, 2A, 3A and 5A); Life Tables in 'Excel': table 9: Present Value of an annuity on a single life (Year's Purchase for a single life) and table 10 ► Ascertainment of Insurance Premiums (Single and Annual Premium based on available single life year's purchase).

1.1: Best known Mortality tables of 17th Century are Northampton and Carlisle tables

And US tables can be viewed in https://www.irs.gov/retirement- actuarial tables. A mortality table is a diagram that shows the death rate for a defined population within a specific rate of time. Also known as a life table or an actuarial table, mortality tables
are used in business by insurance companies to price insurance products and schemes for individuals.

1.2: Salient features in SRS-based Abridged Life Tables 2015-19' (India)

• Expectation of life at birth for India has been estimated at 69.7 years for the period 2015-19, exhibiting an increase of 0.3 years from 2014-18. The life expectancy at birth varies from 65.3 years in Chhattisgarh to 75.9 years in Delhi.
• The expectation of life at birth is 68.3 years in rural areas and 73.0 years in urban areas for 2015-19. The life expectancy has increased by 0.3 years and 0.4 years respectively for rural and urban areas as compared to 2015-19.
• At the national level, the life expectancy at birth for males has been estimated at 68.4 years and that for females, at 71.1 years. Expectation of life at birth is highest in Delhi (74.3 years) for males and in Kerala (78.0 years) for females, whereas it is

lowest in Chhattisgarh (63.7 years) for males and Uttar Pradesh (66.2 years) for females.

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