Case Study: Rated Ages

Independent Life recently had the opportunity to play a critical role in the resolution of a complex claim that had been going on for over 6 years.


Hector, a 40-year old construction worker, fell 30 feet from the roof of a warehouse and suffered severe brain and spinal cord injuries.  The accident has left Hector in a persistent vegetative state and in a rehabilitation facility for the last six years.  Settlement negotiations for his workers’ compensation claim had stalled throughout the process.


When the settlement planner submitted Hector’s medical records to the market for review, Independent Life was able to provide a rated age of 70. This was in line with Hector’s true reduced life expectancy and far higher than what other providers were willing to offer. This is typical of other life insurers and is a result of their legacy liabilities in a declining interest rate environment.

This solution enabled Hector’s attorney to settle the claim. Absent Independent Life’s rated age, a structured settlement would not have been possible because there was not enough money to guarantee Hector’s future needs if he outlived his life expectancy. And the claim would likely not have resolved because the gap was too far to bridge.

This is a perfect example of why rated ages are so important for not only the structured settlement industry, but for the claims administration world as well.  Structured settlements act as a risk transfer tool to move long term obligations from a defendant (or their insurer) to a highly rated insurance company equipped to make those payments on time, every time, to the injury victim.  In order for that to make sense for all parties, the economics have to work.  Without the reduced life expectancy being analyzed correctly, the structured settlement becomes an ineffective solution.

As the first life insurer solely focused on structured settlements, Independent Life provides competitive and innovative annuity products to offer the best possible outcomes to settling plaintiffs.  We do this with market-leading pricing, enhanced medical underwriting, and exceptional customer service.