There are times when one’s financial needs change, and the thought “Should I sell my structured settlement” is considered in order to take care of debt, unexpected expenses or other reasons. When you start to look at buyout companies for a structured settlement, it’s important to make sure you’re selling for the right reasons.
Sometimes it has to do with unexpected medical bills, growing debt, or things like home repairs or paying for your child’s tuition. While we would advise considering all your options before thinking to sell an annuity, if this is your decision then we’re here to help.
The first thing many want to know is what is the structured settlement present value, and we have a present value settlement calculator to help provide an approximate idea of the potential worth.
You should know that the actual settlement present value is based on a few details that are not computed by the calculator and must be processed for a more exact amount. There are simply too many variables to create exact accuracy, but our calculator gives you a good idea what your annuity settlement is worth.
Before deciding to sell your settlement, you might consider what other assets or possibilities are available to you. From borrowing to selling other assets, it’s always wise to weigh all options.
When deciding to sell a structured settlement, it will be helpful to have all documentation and papers together, as these will be asked of you to determine what your settlement is worth.
When evaluating what a settlement is worth, the match tends to be complicated, but the overall principal is easy to follow. A dollar today is better than a dollar in the future, and this is in part due to inflation.
Which sounds better to you? Do you prefer $10,000 today, or would you wait a year for $10,001 instead? But if asked whether you want $10,000 today or $20,000 tomorrow, most will wait the extra day. This is known as the “time value of money”.
Some make reference to a structured settlement as a reverse mortgage. If you consider the lump sum buyout in this way, it can help to understand how it works. When you get a mortgage, you are receiving a lump sum up front, which you then pay off through monthly payments.
When you add up all those monthly mortgage payments, its far greater than the amount you borrowed. If someone were to take a 30 year mortgage of $100,000, and if the interest remained at 5% for the entire time of borrowing, you would then pay over $193,000. You can see for yourself on any mortgage calculator.
But when you cash out a structure settlement, its working in reverse. Instead of receiving the amount through a stream of payments over a certain period of time, you are instead choosing the discount rate.
If you’re wondering what the value of your own annuity, try our structured settlement buyout calculatorfor a present value estimate.
When a structured settlement buyer takes over your payments, they will wait the duration to collect on full amount, while you take the lump sum cash now. In between there is a profit margin made by companies like My Structured Settlement Cash, court costs, processing, and other miscellaneous expenses. Note that with My Structured Settlement Cash there are no hidden fees or costs. While our calculator provides an estimate, your quote provides the actual present value.
Things you should do to get your best offer include have all info and disclosures, shopping around, and consult with your attorney.