Rated Age

If the claimant has sustained a personal injury that could reduce his life expectancy, a "rated age" which is higher than the claimant's actual age, may be assigned. Because of this, the cost of providing lifetime periodic payments to the individual is reduced.

How we live, what we eat, drink, or whether we smoke, all affects life expectancy. Even if the medical condition was not a result of the personal injury claim, reduced life expectancy of any nature will change the rated age. It is important if there are health concerns to submit medical records to the underwriting department of the life company to obtain a rated age. This can enhance the rate of return on a life annuity.

Medical underwriting or the life company physician will review the claimant's medical records and issue a rated age based upon life expectancy. Rated age greatly reduces the annuity cost of life contingent payments. Because rated age is based on the medical underwriters opinion, rated age will vary between life companies.

For example, a 20 year old male who has suffered head trauma may now have a 26 year life expectancy as opposed to the 55 year life expectancy of a healthy 20 year old male. His rated age would be 49. The cost of providing lifetime income for that person will be far less than the standard rate. Because of the reduced cost, more benefits may be provided to the claimant.