Mortality and life expectancy in damages calculations

A future loss is only incurred while the plaintiff is alive, so every future year is weighted by the probability of surviving to it. Those survival probabilities come from published actuarial mortality tables. The longer and more distant the loss, the more mortality matters, so the life-expectancy assumption is one of the most important inputs in any long-horizon damages figure.

This article explains the mortality piece in plain language. It is background on the method, not legal or actuarial advice for a specific file.

Why mortality enters the calculation at all

Future loss of income runs to retirement, and future cost of care can run for life. Neither is certain to be paid in full, because the plaintiff might not survive every year of the projection. Rather than assume the person lives exactly to their average life expectancy and stops, the calculation weights each future year by the chance of being alive that year. This "survival weighting" is applied on top of discounting for the time value of money, so a dollar far in the future is reduced both for time and for the probability of reaching it.

Where the probabilities come from

The survival probabilities are drawn from published actuarial mortality tables, such as the Statistics Canada life tables. A life table gives, for each age and sex, the probability of surviving to each later age. DamageIQ records which edition it used (for example, Statistics Canada 2022 to 2024) so a figure produced today can be reproduced later even after the tables are updated.

Standard vs. reduced life expectancy

DamageIQ offers three mortality bases, chosen once in File Details:

• Standard. Survival follows the published table for the plaintiff's age and sex. This is the usual choice, and the summary shows the resulting life-expectancy age.
• Reduced. Where the medical evidence supports a shortened life expectancy, the projection is capped to a target age. This lowers the present value of long-dated, lifelong losses the most, because the distant years are removed or down-weighted.
• None (discounting only). Survival weighting is switched off and future amounts are discounted for time alone. This is used only where a calculation is meant to ignore mortality by design.

Life expectancy is a single actuarial assumption, not two separate ones: choosing the basis and choosing the underlying table are the same decision, which is why the file summary shows them together.

Why it moves the number

Because mortality compounds year over year, its effect grows with the length of the projection. A short future period (a plaintiff near retirement, or a care item lasting a few years) is barely changed by survival weighting. A long one (a young plaintiff with lifelong care) is changed substantially, and a reduced life expectancy can move the present value materially. Because mortality compounds over a long projection, the basis has a large effect on long-horizon figures and little effect on short ones.

A calculation, not an opinion

DamageIQ is a calculator. It applies the selected mortality table and basis to the ages and dates you enter and shows a transparent figure with every input traceable. It is not an expert opinion, and it never claims to be; the choice of basis and any reduced life expectancy are yours to set and to support with evidence. Where life expectancy itself is in dispute, that is a matter for a medical or actuarial opinion, not a calculator.

Try it

The free PV Multiplier calculator shows how survival weighting flows through to present-value factors for any age, sex, jurisdiction, and discount rate. For the wider method, see How present-value damages are calculated in Canada, and for how mortality applies within each module, loss of income and future cost of care.

By Mike Austin, FCIA, FSA. Fellow of the Canadian Institute of Actuaries and the Society of Actuaries.