2. Legal Approach: Personal Injury Value

I couldn’t find a legal description of compensation for loss of life, but I did find the following that describes legal compensation in cases of personal injury:

In personal injury lawsuits, awards are designed to place the injured person in the position that he or she was in prior to the accident. However, because we cannot reverse time and prevent the accident from occurring, the only alternative for an injured person is an award of money damages. Although determining the amount of such damages is not an exact science, there are three main areas a jury evaluates before determining what they believe is an appropriate award:

* past and future medical bills;

* past and future lost wages; and

* past and future pain and suffering.

If I were to generalize this description of legal compensation for personal injury to come up with a description of legal compensation for death, it appears that the value of a life would be the market value, as described in the section above and as presented in rows [1] through [4] in the summary table.

3. Insurance Approach: Accidental Death Payment

The typical advertisement for life insurance offers up to $1,000,000 in payment, less the cost of the insurance premiums.

…you can be protected with Accidental Death Insurance from Mutual of Omaha Insurance Company. Your loved ones can receive up to $1,000,000 in benefits upon your death -- payable regardless of any other insurance you may have and income tax free under current federal tax laws. Best of all, your premiums are easy on your checkbook with coverage starting at 83 cents a day.

This would suggest an upper bound on the average value of a life of $1,000,000 (see row [5] in the summary table above).

4. State Government Approach: Death of a Police Officer

The New Jersey State Police award the spouse of an officer killed in the line of duty an annual pension of 70% of the officer’s annual compensation until the spouse dies.

Upon the receipt of proper proofs of the death of a member on account of which an accidental death benefit is payable, there shall be paid to the surviving spouse a pension of 70% of final compensation or of adjusted final compensation, as appropriate, for the use of that spouse and children of the deceased, to continue for as long as the person qualifies as a "surviving spouse" for the purposes of this act.

One source indicates that the average salary of a police officer in the US is $46,000. To calculate the value of the pension paid to the officer’s survivors, I assume that a young officer’s annual compensation is $40,000, and older officer’s annual compensation is $48,000, and an officer close to retirement earns annual compensation of $52,000. I then assume a young officer is killed at the age of 35, an older officer is killed at the age of 45, and an officer close to retirement is killed at the age of 55. Finally, in each of these three cases I assume the surviving spouse lives to the age of 75, and I use a discount rate of 3% to calculate the present value of the survivor’s pension at of the time of the officer’s death. The results are presented in rows [6] through [8] of the summary table above.