Q: If I am injured in a car accident in Idaho and receive damages to compensate me for my injuries, how is that money paid out?
Usually an award of damages is paid out in a lump sum to the victim, meaning you get it all at once. In the case of very big awards, and depending on the unique circumstances of the injury victim, it is sometimes paid out in the form of an annuity.
An annuity is a contract that is purchased which provides for the payment of a certain amount of money on a set schedule for the duration of the injury victim’s life. The amount of the monthly annuity would depend in large part on the victim’s life expectancy at the time of the award of damages.
While most injury victims prefer to receive their damages award all at once, an annuity may be the better way for people who will need lifelong medical care. If the victim lives many years longer than predicted, there otherwise may not be enough of the damages award left in later years for medical treatment if the damages award is taken as a lump sum and gradually spent down in the course of one’s life.
Q: How is it determined what that lump sum would be if it’s unclear how much medical treatment I will need?
We usually use doctors to give us an estimate of how much treatment is needed in the future. Based on that, we might hire an economist to project what the cost will be in the future over their lifetime. For example, the social security administration releases actuarial tables on life expectancy based on the client’s age and gender.
We can also hire economists or rehab consultants to estimate what their work life expectancy is, and if they are unable to go back into the job, they worked before they were injured.
The information we gather from our experts is presented to the jury and they decide how much you should be compensated.