What is the monetary value of a person’s life? It is hard to put a number on it, and in reality, a person’s life is invaluable. However, when calculating damages in a wrongful death or catastrophic injury case, the plaintiff must provide some method of establishing the future economic value of the victim in the case. It is not easy, but financial experts do just that. In fact, they can be indispensable to the victim and his or her family in determining the economic value of a person’s life if the life-altering or life-ending event had not taken place.
Understanding short-term lost wages is not terribly difficult. All one needs to do is calculate the amount of money the injured person’s employer would have paid during the time frame in which the personal injury victim did not work. Those calculations can be made by obtaining a copy of the injured person’s W-2 tax form or a copy of their previous year’s taxes. However, that method of calculating damages may be insufficient if the victim’s time out of work lasts longer than a year or two. Retaining a financial expert, such as an actuary or economist, may be necessary to analyze the victim’s situation and then ascertain how much the person’s life is worth. It is more than simply arithmetic.
Actuaries understand how to determine the future economic loss of the person injury victim by using a complicated series of formulas and arriving at a figure. Those calculations are more complex than just adding the average salary until the person would arrive at retirement age because the real measure of damages is more than the loss of future earnings. Loss of earnings capacity also includes the lost capacity for future earnings.
Actuaries analyze more than a lost paycheck when trying to compute the loss of earnings capacity. Actuaries need to examine how the loss of social security payments, pension or retirement plans would affect the person injury victim’s earnings capacity. Furthermore, the actuary must determine the victim’s salary increase over time. Tax analysis is also included in the actuary’s opinion. If the victim requires further medical treatment, then the actuary must determine medical costs the victim could suffer in the future.
The actuary arrives at the answers to these questions by considering variables of the person’s life, especially in wrongful death cases. For example, if the person tragically killed by someone else’s negligence were only eight years of age, then the actuary would need to consider how much money a person could make depending on whether or not the victim might have gone to college. An actuary would also normally calculate the victim’s earning capacity with rising and falling interest rates as well. Consequently, the actuary’s assumptions or estimates must be accurate based on the data. One mistake could render their conclusions useless.
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If you have tragically lost a loved one due to someone else’s negligence, call Montlick & Associates, Attorneys at Law for your free consultation today. Montlick & Associates has been representing those who suffer serious injuries throughout all of Georgia and in the Southeast for over 39 years, including but not limited to Albany, Athens, Atlanta, Augusta, Columbus, Gainesville, Macon, Marietta, Rome, Roswell, Savannah, Smyrna, Valdosta, Warner Robins and all smaller cities and rural areas in the state.
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Montlick & Associates, Attorneys at Law
17 Executive Park Dr NE
Atlanta, GA 30329
Telephone: 1 (800) LAW-NEED
Telephone: 1 (404) 529-6333