How to Use a Structured Settlement Calculator
Structured settlements are awards paid to injured individuals in exchange for signing contracts promising financial compensation over a period of time. These contracts are usually long-term equity transactions that give financial institutions and companies the right to purchase future payments from the person awarded the payout. Because they are usually very complicated, many people are skeptical about accepting such a large sum of money in exchange for a one-time payment. Using a Structured Settlement Calculator can help alleviate some of these doubts, since it takes into account not only the value of future payments, but also the current value of the structured settlement.
The online structured settlement calculator gives an accurate estimate of exactly how much a person”s structured settlement payments are worth. Unlike competing companies, this online method is almost never inaccurate or misleading, making it easy to calculate a sell-out. In addition, the online calculator is so easy to use, which makes calculating a structured settlement payment so much easier than it once was.
One of the primary reasons people decide to sell their payments is to avoid paying taxes on the lump sum they would receive. Some people may also need immediate cash to pay off mounting medical bills or to start a new business. In all these situations, a lump sum payment may be the easiest way to achieve a long-term financial goal. Unfortunately, there are several tax issues involved when someone sells their annuity, as structured settlement calculators can only take into consideration the market value of a standard annuity, not the current tax rate. If you are unsure whether selling your annuity is the best option for you, it is a good idea to consult with a professional tax adviser to have them review your financial situation to ensure that selling your payments is a wise move.
In order to determine the present value of your annuity payments, you will need to know several factors. First, you will need to calculate the present value of your payments over the course of the expected lifetime of your annuity. This calculation can be done by using one of two methods: life table method or factor rate method. In general, life-table methods are more accurate because they take into account the expected changes in your annuity amount as you age; however, if you are providing insurance or retirement funds, you may want to use the factor rate method, as this will give a more accurate figure.
Once you have determined the present value of your structured settlement payments, you will need to determine an initial price for your annuity. Although there are several companies that offer structured settlement calculators online, using an actual financial institution to buy your payments is preferable, as they are able to offer personal assistance based on your specific needs and circumstances. In general, a financial institution will require you to provide details about the present value of your structured settlement payments, your age, whether you are planning to live in your home as you receive your payments, and other details. Before allowing them to buy your payments, they will review your information and run some calculations to determine an amount that they believe is fair enough. They will then either offer you cash outright or will negotiate with the company that gave you the settlement to purchase your lump sum amount at a later date.
There are a number of different types of structured settlement calculators. Some of the most popular are those that provide monthly, quarterly, and annual figures. These calculators will help you decide what kind of payment you would like to receive, as well as how much your payout will be over time. Knowing these figures will help you make important financial decisions, such as choosing a life insurance provider, a loan provider, or even if you should sell your future payments for a lump sum payment. Using a structured settlement calculator can significantly improve the accuracy of your future payout calculations.