What Does A Structured Settlement Calculator Do?
Structured settlements-present value of future payments. The current value of future cash you’ll receive from a structured settlement, also known as a structured annuity, is basically the amount that would be given to you today, in the same manner that you would receive an annuity payment. However, this amount may vary depending on the agreement you have signed with the insurance or financial institution that gave you the settlement; and it may also depend on how long it will take for you to reach a payout level that suits you. Basically, it’s all about looking at how much income you are projected to make over the course of your life, compared to the income level you would have otherwise enjoyed if you had never taken out the settlement in the first place.
Most people tend to use a structured settlement calculator to figure out their maximum potential payout. But there is a much more useful way to figure this out: to use the actual numbers that a structured settlement purchaser will give you. These numbers will allow you to see just how much income you could potentially get on top of your regular income for the duration of your life after filing a claim. The most common numbers given to people are the effective discount rate and the initial payment amount. But the actual amount you receive from a settlement will still largely depend on the negotiation done by your structured settlement purchaser. And even if you don’t have one of these calculators online, you can easily get these numbers from the websites of companies that buy these settlements.
Basically, a structured settlement calculator tells you how much money you would stand to make in regular monthly installments if you were given a lump sum. This can either be in the form of a traditional annuity (a fixed amount of money paid monthly), or in the form of a specialized type of annuity known as a variable universal life (VUL). The first type of annuities allows you to switch between regular payments and interest-bearing investments while the later type of annuities allows you to use interest income in order to pay regular payments without converting them into interests. This calculator can help you determine which of these options is best for you.
When using a structured settlement calculator, all you have to do is plug in the information regarding your structured settlement payments and some basic information about you. Your birth date is required, as is information about your gender. You also need to know the total number of payments you expect to receive over the course of your lifetime (including payments that are already paid in the present) and your net worth. It’s also required that you provide information about your employer and the current employment situation. Once all of this information is provided, you can plug in the amounts your structured settlement payments would create, and the numbers that appear in the various sections of the calculator will tell you how much money you could potentially earn over time.
The first section of a structured settlement calculator calculates how much your annuity would be worth if you sold it in full today. This section also takes into account the amount of time you expect to live after your settlement (in years or months). If you have any dependents, it’s also necessary to provide them with information about them as well. All of this should be completed before you plug anything else into the Structured Settlement Calculator.
The next section of the calculator helps you calculate how much money you’d earn if you were to sell all or part of your annuity. This section takes your age and current age and average life expectancy figures into consideration. It then multiplies these values by a discount rate in order to give you the amount of money you’d be able to earn if you sold all or part of your structured settlement payments today. The discount rate is typically a percentage of the face value of the annuity.