The internet offers a variety of financial tools and one of these financial tools is the Structured Settlement Calculator. This online tool gives an accurate figure of exactly how much a person’s structured settlement is valued at. Unlike other companies, this particular method is both dependable and completely ethical. In addition, the online calculator is simple to utilize, which makes calculating a large structured settlement payoff much easier than it traditionally used to be.
The first thing that is needed when using a Structured Settlement Calculator is the date of birth of the recipient. It is also necessary to have information regarding the total lump sum that is being offered. This lump sum amount will be used to factor in the discount rate that is used with annuity payments. The better the discount rate, the less money the beneficiary will need to pay when the settlement time arrives. When determining the discount rate, it is best to consult an expert in taxation, as this discount rate changes according to the economy.
The second thing that is needed to determine how much money can be received in structured settlement payments is the amount of time it will take for the recipient of the settlement payments to receive his/her payments. It takes time for the courts, insurance companies, and private insurance firms to record the details of a settlement payment. Therefore, it can take up to several years for such details to reflect in an account. The more years it takes for the details to reflect, the lower the lump sum can be.
The third thing that is needed when using a Structured Settlement Calculator is the interest rate. Interest rates are frequently adjusted on annuities, so it is best to use an online calculator that is updated regularly with the current interest rate. However, if the interest rates have decreased since the settlement was settled, then it would be a good idea to use a calculator that is based on the actual payment amount, which is likely to have been determined by an insurance company’s underwriting. A good structured settlement calculator will also take into consideration any additional fees that would have been incurred during the settlement process, and factor these into the final value.
The fourth item that a structured settlement calculator should include is the cost of an annuity. When choosing a payment annuity, it is a good idea to get the full details of the annuity and its intended use. Some individuals purchase annuities for investment purposes and others purchase them simply to payout a lump sum once they reach a certain age or reach a particular point in their lives. A good rule of thumb is to buy an annuity that will give the recipient a greater income stream upon retirement. Some good choices include indexed annuities and/or units that pay out upon a specific amount of money being invested. One great example of an indexed annuity is the Thrift Savings Plan, which has a guaranteed deposit and an effective discount rate.
The fifth item that a good structured settlement calculator should include is the impact of life insurance on a settlement. Many individuals who need assistance with their taxes choose to include life insurance as part of the settlement because life insurance can help defray some of the expenses that may have been incurred in settling the case. A good rule of thumb is to determine how much life insurance would be worth on a total face value basis when taking future payments into consideration. If future payments are not required, it may be better to simply purchase the policy and let the buyer decide what level of life insurance they want.