How do you know the value of a structured settlement? By using a structured settlement buyout calculator, of course. The thing is, the value of a structured settlement is a bit difficult to measure. There are many factors affecting the real worth of a settlement. The fact that today’s dollar worth more than future dollar should be considered as well.
Factors in the CalculationWhat factors affect the worth of your structured settlement? There are three main factors: time to completion of the settlement, the total amount of money you receive from each payment and the frequency of the payment. Let’s get into each one.
Time to completionCheck your contract. When will the payments be completed? The longer the time completion is, the more worth it has. The duration of the settlement also matters. For example, the worth of four years of payments out of a four-year settlement exceeds the worth of the last four years of payments out of a ten-year settlement.
The total amount of money received per paymentHow much do you receive in each payment? The larger the amount, the more worth the settlement has. With more settlement worth, you have a better bargaining position.
Frequency of paymentThe more frequent the payment, the higher the value of a settlement is. For example, a weekly payment is worth more than a monthly payment.
Which Calculator to UseThere are many structured settlement buyout calculator online. Their features are not without flaws. Some of them don’t include various factors that will affect the calculation. This is understandable. After all, there are many factors that need to be considered yet due to limitations, cannot.
Despite its apparent limitations, a calculator should be able to give you an insight on the baseline of the settlement buyout as well as what you can expect from it. If you really want to know the exact worth, consulting with an expert is always an option.