When you are involved in a lawsuit and are not sure if you will be able to settle the case, one of the best ways to evaluate your settlement is by using a structured settlement calculator. These calculators give you an approximation of your future settlement payments based on your past settlements. It can be an extremely useful tool to help you decide if a settlement is the right option for you. Before you decide how much you will receive upon a settlement, you should first consider how much it will cost you over the long run. Structured Settlement Calculator estimates the difference between the amount you would receive in a lump sum settlement today and the future anticipated payments.
Answer: The answers to the structured settlement calculator give a very rough estimate of future compensation payments. Please note that a structured settlement buyer’s cost of purchasing the annuity often depends on several factors including: the total annuity value, selling life or other guaranteed payments, negotiating skill to obtain a better rate, and whether the sale of the annuity is one that is tax-qualified or not. Structured Settlement Calculator provides an answer to the question “what will I receive after selling my annuity?” in terms of the amount needed to cover living expenses at current prices and future expenses like medical and mortgage costs. A lump sum payment is not required, but if one is obtained, the lump sum payment may be used to reduce monthly obligations.
Structured Settlement Calculator is easy to use. Enter the total lump sum to be received in monthly installments, the time period to which payments are payable, the interest rate, the term of the settlement, the surrender value, and the rate of inflation. The calculator evaluates your settlement and gives you the results instantly. The results are useful as they show how the amount of payments to be paid over the long term will affect your financial situation and ability to cover living expenses. You can also make a few adjustments to maximize the expected return on the settlement before the lump sum settlement is realized to reach your desired level of payout.
A structured settlement calculator is different from an annuity calculator in that it evaluates your settlement payments based on the present value of the cash payments. This means that rather than paying interest, your payments are tax-qualified. Instead of investing in a future annuity, your payments are invested in a lump sum to yield a higher interest rate. A structured settlement calculator uses today’s interest rates to provide your estimates of future payments and is easier to understand than an annuity calculator which evaluates your settlement based on what the money market would be worth at the present time.
Many people who sell annuities or other fixed payments have difficulty understanding the numbers and assumptions used by the different calculators. When using a structured settlement calculator, you can simply follow the instructions to determine the present value of your structured settlement payments. After entering values in the boxes that are provided, these should be divided by each anticipated date of payment to calculate the amount of your lump sum. It is important to remember that the lump sum is simply the difference between what the total payments would be at the time of settlement and the present value of the total structured settlement payments. Because of this difference, lump sum payments are often less than the total expected at the time of settlement.
The accuracy of these types of calculators is limited. Most of the time the numbers that are presented to you will not be accurate because they are estimates and not the actual present value of the settlement payments. This is why it is important to consult a lawyer before determining the value of your structured settlements. Only a lawyer can evaluate the present value of your settlement and advise you on whether or not to sell your payments for a lump sum payment.