COVID-19 and life expectancy. What we know so far.

Demystifying Valuation, Economic Damages + Forensic Accounting

2020…what a ride, am I right? But just how much of an impact did COVID-19 and the resulting pandemic have on average life expectancy? Even more, how does that impact economic damages?

I’m going to skip straight to the punchline, and then we will get into the nitty-gritty: The CDC has reported that in 2020, before vaccines and boosters were a part of life as we know it, average life expectancy decreased by 1.8 years as a result of COVID-19 to 77 years.[1]

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How does this happen?

Typically, life expectancy goes up year after year. The year before the pandemic, 2019 experienced an increase of .1 years to the average life expectancy. While this may not seem significant in and of itself, consider that only 120 years ago, the average life expectancy in the United States was only to age 48.2.[2] We now have (presumably) better health and hygiene practices, improved diets and availability of nutritious foods, and improvements in modern medicine that were not available to our ancestors and allow us to therefore live much longer. Simply put, in 2020 there were enough new deaths in a single year as a result of the coronavirus that it impacted the national mortality rate.

Why is this important?

In economic damages calculations, we often rely on life expectancy data to predict how long damages should be carried forward into the future. Some damages are limited, such as lost wages, which may be only calculated for the years someone is expected to work. On the other hand, future medical costs of care and household services are two categories of damages that would be impacted by changes to life expectancy.

To arrive at a life expectancy age, we base our assumptions on several key data points that are consistent from matter to matter and include date of birth, gender, and the date of the incident. From there, we can surmise an approximation of how long to project damages into the future. In extremely rare cases, an injury may be so profound that an expert may even decrease the life expectancy, which would result in a truncated damages window.

So, you know when I’m going to die?

Well, not exactly. The life expectancy is only an average number of remaining years that a human may expect to live after having reached a given age, and very few people will die at their exact life expectancy. In fact, many cultures in the world may experience high numbers of infant deaths, but also have many old citizens that are still alive.

What does this mean for my economic damages case?

For the most part, probably not much. Just as this expectancy data has been adjusted down due to COVID-19, it will likely be adjusted back up in coming years as more people get vaccinated, and the virus strains get weaker. However, each situation is different, and if you have questions about your specific circumstances, please contact us. For more information on the litigation and valuation services we provide, check out our Services page.

Alison Wise, CFE