Structured Settlement Buyout Percentage
When you arrange a buyout to sell your structured settlement, there are several things going on behind the scenes. Generally speaking, you'll discuss the details of your current structured settlement with a company and then get a quote for a buyout - either a full or partial buyout.
If you then took your details to another financial company, you might get a totally different quote. The difference between the two quotes is usually due to the structured settlement buyout percentage. This buyout percentage corresponds with the discount rate used by the companies as they evaluate your annuity, or stream of payments. The lower the discount rate, the higher the amounts you'll be offered for your annuity should you decide to sell. You can learn more about how the value of a settlement is determined and what your structured settlement worth would be.
While some companies advertise their discount rates and buyout percentages for would-be customers directly on the company's website, others keep this information a bit more discreet, but getting a settlement quote from a few different sources makes it very clear just how different these buyout percentages can be and what the direct effect is on your lump sum payment.
It may help to think of the discount rate or settlement buyout percentage as a mortgage interest rate in reverse. When you take out a mortgage at 5 percent, you'll be paying interest to the bank along with your principal payment for thirty years. When you sell a structured settlement, you'll no longer be receiving your own interest payments and principal from your annuity. Instead, you'll get a portion of the value immediately.
You might also be interested to learn about what settlement brokers charge to understand the process better and become familiar with how things work.
To get a free estimate, try our structured settlement calculator and find out what your annuity settlement is worth.