Legal Definitions - expectation of life

The term expectation of life refers to the statistically predicted number of years a person is expected to live from a given point in time. It is a statistical average, not a precise prediction for any single individual, and is often based on factors such as age, gender, and general health at the time of assessment. In legal contexts, it is frequently used to calculate damages in cases involving injury or death, determine insurance payouts, or structure long-term financial arrangements.

• Example 1: Wrongful Death Lawsuit

  A 45-year-old individual, who was previously in excellent health, tragically dies due to another party's negligence. In the subsequent wrongful death lawsuit, the court needs to calculate the financial losses suffered by the deceased's family, including lost future earnings. To do this, the court will consider the deceased's expectation of life at the time of their death. They might consult actuarial tables to determine how many more years the individual was statistically likely to have worked and contributed to their family's income, using this figure to estimate the total economic damages.

• Example 2: Annuity Calculation

  An insurance company is designing an annuity product that promises a fixed monthly payment to a retiree for the rest of their life. To determine the premium the retiree must pay and the amount of the monthly payout, the insurance company relies heavily on the expectation of life for individuals of that age and demographic. If a 65-year-old woman purchases the annuity, the company will use statistical data on the average lifespan of 65-year-old women to project how long they will likely need to make payments, thereby calculating the financial viability of the product.

• Example 3: Structured Settlement for Personal Injury

  A young adult suffers a severe, permanent injury in an accident that leaves them unable to work. As part of a settlement, the responsible party agrees to provide a structured settlement, paying the injured individual a certain amount annually for the remainder of their life. To determine the total value of this settlement and the annual payment amount, the attorneys and actuaries will assess the injured person's expectation of life. Even though the individual's health has been impacted, their new life expectancy will be estimated based on medical prognoses and statistical data for individuals with similar conditions, ensuring the settlement provides support for their projected lifespan.