Rated Age and Impaired Risk Rating

Rated Ages and Structured Settlement Cost

Use Adverse Medical Information to Your Advantage

With a rated age you use adverse medical information to YOUR advantage for structured settlement annuity pricing.  
  • Two New York admitted structured settlement annuity issuers will medically underwrite personal injury attorneys for structured settlement rated ages, which may be helpful if the attorney is structuring his or her attorney fees. Outside of New York there are also two carriers who will medically underwrite attorneys for structured attorney fees..
  • Note that Rated Ages have expiration dates which are usually 6-12 months , varying by annuity issuing life insurer, after which the rated ages need to be renewed, or in some cases of the medicals being too far aged, may need to be re-underwritten.
How Rated Ages Impact New York Structured Judgments under New York CPLR Articles 50A and 50B

A rated age could also reduce the cost of a structured judgment in New York for a Defendant. Certain aspects of a CPLR 50A or CPLR 50B structured judgment are life contingent, such as the adjusted awards for future medical expenses and future pain & suffering. A rated age would most likely impact future medicals, which stretch many years into the future, Under New York law, future pain & suffering is compressed into 8 years for Article 50-A and 10 years for Article 50-B structured judgments, so it would need an exceptionally high rated age and a large amount of damages to have significant impact on that component of damages.

The life expectancy of a plaintiff can be an important cost factor in a structured settlement where the periodic payments are payable for the lifetime of the plaintiff, or the payment is a life contingent deferred lump sum. The annuity cost for such periodic payments is affected by age, sex and the nature of the plaintiff's injuries. Certain medical conditions and injuries can result in a "rated age" or "impaired risk rating" when an underwriter at the annuity issuing life insurance company estimates that the plaintiff may not live a normal lifetime and is willing to accept the risk of providing lifetime payments at a lower annuity premium cost than otherwise would be required. The annuity is quoted as if the rated age is the plaintiff's age. The annuity issuing life insurance company assumes the risk that an annuitant lives longer than expected. The exposure to risk is the opposite of the risk that the same life insurance company would be exposed to in underwriting life insurance on the plaintiff, namely that the plaintiff (insured) dies sooner than expected.
The risk that the life insurance company absorbs is a huge benefit to a plaintiff with lifetime medical needs and/or a need for lifetime income, who needs absolute certainty. Using a structured annuity with a deferred start date as an "annuity back stop" is often a prudent strategy to conserve assets when there is a wide range between high and low mortality assessments. The life insurance company issuing the structured settlement annuity (also known as an "enhanced annuity", "underwritten annuity" or "enhanced "SPIA") has hundreds of thousands of people over which to spread its risk, something that the individual plaintiff does not. 

The following conditions are examples of some that might result in a rated age or impaired risk rating: head injuries causing brain damage and/or paralysis, cancer, heart conditions, spinal cord injuries, serious internal organ damage, high blood pressure, diabetes and other conditions and/or illnesses affecting activities of daily living. Please note that the condition giving rise to the rated age need not have any relation to the injury on which the claim, dispute or lawsuit is based.  Where these or conditions are present, please send medical records to our office and we will ask the underwriters at our life insurance company resources to provide us with a "rated age" evaluation. The most current relevant medicals will usually generate the best result. 

The rated age may vary widely among life insurance companiesWe actively shop through our extensive resources to achieve the best price/benefit package for your structured settlement.

We also suggest that attorneys refrain from pre-underwriting rated ages themselves. From time to time we encounter cases where the attorney dismisses the possibility of a rated age and yet we end up obtaining one. As the cost savings or yield boost from the rated age may be significant why leave yourself exposed by not getting the best for your client?

Rated ages, impaired risk or medically underwritten income annuities may be available in a wide variety of other applications as wellFor example an immediate annuity with a rated age could partially offset increased costs for life insurance, or boost retirement income to the annuitant.

We will need the history of illness, including date of diagnosis, any changes in condition, other significant health conditions and pertinent past histories. Please try to keep it less than 20 pages.

Acceptable forms of medical information:
  • Hospital discharge summaries for last 5 years. 
  • Medical report from time of diagnosis. 
  • Most recent medical report. 
  • Attending physicians statement (APS).
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