Mortality modeling via vitality: Model constructions and actuarial applications

Mortality modeling plays a central role in actuarial science, with applications ranging from life insurance valuation to optimal lifetime financial planning. Traditional approaches, such as mortality laws and factor-based models, often fall short in capturing the complexity and heterogeneity of mortality dynamics. This paper introduces a novel modeling framework based on the concept of vitality and its stochastic evolution over the life course. The framework consists of four components that account for initial health conditions, natural aging trends, stochastic fluctuations, and sudden accidental events. We explore how modeling mortality through vitality can replicate a wide class of existing mortality models and capture diverse features such as mortality plateaus and longevity trends. Through multiple applications, including optimal consumption planning and disability modeling, we show that the vitality-based framework is capable of providing tractable solutions and intuitive insights to a broad range of mortality-related problems. A numerical illustration using real-world mortality data further demonstrates the framework’s estimation procedure and modeling outcomes.