Hazard Consistency Checker
Check whether an annual death probability matches a constant force of mortality within a tolerance.
Description
Compare an annual event probability with the probability implied by a constant annual hazard rate.
Hazard and Probability Consistency Checker helps you compare an annual event probability with the probability implied by a constant annual hazard rate.
Use this checker to catch unit or transformation mistakes when both a constant force of decrement and an annual probability are available. It reports the implied probability and their numerical difference.
When to use Hazard and Probability Consistency Checker
Use this checker to catch unit or transformation mistakes when both a constant force of decrement and an annual probability are available. It reports the implied probability and their numerical difference.1
How the calculation works
Under a constant hazard μ, one-year survival is exp(−μ), so the annual event probability is one minus that survival value. The difference compares the supplied probability with this implied value.2
q = 1 − exp(−μ) Inputs and interpretation
Enter μ as a nonnegative force per year and q as a probability from zero to one. A force is not itself a probability, even when the two are numerically close at small values.
Limitations and assumptions
Agreement only establishes consistency with a constant-within-year transformation. It does not validate the underlying data, show that the hazard is constant across ages or durations, or account for competing risks.
References
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Supplementary Notes for Actuarial Mathematics for Life Contingent Risks — Society of Actuaries
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Actuarial science — Wikipedia contributors
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