What is an impairment rating or age rating?
As noted above, where an accident or a health condition lowers the plaintiff’s life expectancy the life insurance company underwriting the structure will expect to pay benefits for a shorter period of time than is called for by mortality tables.The process of determining how long the plaintiff is expected to live is called an impairment rating, or an age rating.For example, a life insurer paying $1,000 monthly will charge less for a structured annuity if the plaintiff is expected to live only 15 years longer instead of 30 years longer. Thus a 45-year old might be treated like a 60-year old for the purposes of establishing the price of the structure.
