A Structured Settlement Calculator is a special tool that can be used by individuals or law firms to find out what is the amount that an individual or company would receive if they were to accept a settlement offer in lieu of a lump sum award. Generally speaking, all that is required to properly run such a calculation through a Structured Settlement Calculator are: an injury victim’s name, address, and amount of each structured settlement payment. The reason why you would want to use a Structured Settlement Calculator instead of a standard annuity calculator is because of the significant advantages that it provides. It takes into consideration a large number of variables that standard annuity calculators typically do not.
Most importantly, a structured settlement calculator tells you the value of your future income in comparison to your past income. Think about it. If you were to receive a large lump sum now, what effect will that have on your life? Basically, all the money that you would have received would go towards paying off all your debts and replacing your current income. While this may not seem fair to you, it is true and what is called the present value of your future income is what the structured settlement payments calculator is looking to determine.
Another advantage to using a structured settlements calculator is that it can help you budget. When people accept settlement offers, they don’t have much money to put towards their future. With a calculator, you can enter how much money you would need to live on currently, continue to work, and replace your income if you were to receive a large structured settlements annuity. Once you have entered these numbers, you can plug them into the calculator to determine exactly how much income you would receive should you accept an offer. Using the present value of your future income allows you to better plan for your future.
Before you start using a structured settlement calculator, you should know a couple of important things. The first is that you should never, ever accept a lump sum payment. It is very tempting when you get a large lump sum of money from a company to accept it in exchange for a smaller lump sum in the future. However, you are risking losing all of the future payments that you would have received. In addition, it is extremely risky because there is no guarantee that the company will continue to provide you with a steady stream of payments. In fact, if things ever go drastically wrong, you could be left with nothing at all.
In order to make sure that you are making the right decisions, you need to have as much information as possible regarding structured settlement payments before you make any final decisions. This way, you can make an informed decision about whether you want to accept a lump sum or use the structured settlement calculator to estimate the amount of payments you would actually receive. Structured Settlement calculators can also help you determine what you will receive in a life insurance settlement.
When you sell structured settlement payments for a lump sum, you are essentially giving up all of your future income. However, it is important to note that there are certain circumstances that may make this an appropriate course of action. In many cases, companies will purchase these payments at a discounted rate in order to free up capital that they have. In some cases, the company will receive a fair market value for the payments and choose to keep them or sell them at a discounted rate in the future.