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FAQ for Trial Attorneys
  1. Introduction
  2. What is a Structured Settlement?
  3. Advantages to the Plaintiff
  4. Disadvantages to the Plaintiff
  5. Managing the Disadvantages
  6. Appropriate Cases
  7. Inappropriate Cases
  8. Case Size
  9. Why Annuities?
  10. Annuity Pricing
  11. Reduced Life Expect. Discounts
  12. What is an "Assignment"?
  13. Structure of the Deal
  14. Insurance Company Ratings
  15. The Closing Process
  16. What Settlement Brokers Do
  17. How Are SS Brokers Paid?
  18. If the Defense Has Their Own Broker, How will My Broker Be Paid?
Home Page > "How to" For Plaintiff Attorneys >ABC's

Reduced Life Expectancy Discounts

Any case in which the plaintiff suffers from a life-shortening medical condition holds the potential for a price discount. Since life annuities are priced based on standard life expectancy tables, any reduction in life expectancy means a reduction in the number of payments the insurance company expects to make. This translates into either lower cost or higher benefits.

The condition need not be related to the claim, but it must be a documented condition that the annuity company has reviewed in advance of funding.

To consider such a discount, annuity companies engage in what's known as "medical underwriting". They review the plaintiff's medical records and assess to what degree they feel life expectancy has been compromised. That factor is then discounted in the pricing.

To apply for such a discount, you must provide your broker with copies of current medical records (within one year) that describe the plaintiff's condition. Also, you should provide your broker with any life care plan that has been prepared. The broker will then survey the annuity markets to see what, if any, discounts companies are willing to give and report back to you.

The size of these discounts can be substantial. In the most severe cases, it is not uncommon for seriously injured plaintiffs to boost their future benefits by 50-100% or more. Chronic medical conditions such as diabetes or hypertension should definately be mentioned to your broker. [click here for a list of common conditions likely to qualify for discount pricing.]