Selling Your Structured Settlement - Getting the Best Quote
It’s important to remember two things when you are looking for the best quote on your structured settlement.
The first is that there is a time value of money. Your structured settlement payments are worth more now than they will be in the future. This means that any quotes you get to sell your structured payments are going to be less than the face value of your settlement. This reduced amount takes this time value of money into account.
The second important thing to remember is that financial companies who buy structured settlements uses a different buyout percentage or discount rate to determine the amount they are willing to offer on a structured settlement. Sometimes this rate is negotiable, and sometimes it is not. The discount rate is the percentage of the present value of the annuity that the company is willing to pay for your settlement. The percentage again reduces the face value of the annuity.
With these two factors applied, the quote you receive for your structured settlement will be less than what you may have initially thought you’d hear. But there is good news. By shopping around and working with reputable financial companies, you can get higher quotes from companies with different buyout percentages. Once you have your lump sum, you may also be able to invest it yourself and let the time value of money work in your favor.