What Determines Your Lump Sum Payout Should You Sell Your Structured Settlement Annuity
- 13 years ago
Hi this is Lindsey speaking to you on behalf of Corona Capital. Our company buys annuities and structured settlements. Today I'd like to discuss what determines the amount of money you'd receive should you decide to sell your future annuity or structured settlement payments. The amount of money you'd get is essentially based upon 3 factors:
1) The dates your future payments are due
2) The amount of your future payment
3) The discount rate being charged
Firstly, The date that your future payments are due is an important factor when determining how much your lump sum payout will be. This is called Present Value. Quite simply, the closer your future payments are to today's date the more they are worth. For example, a $50,000 payment due on January 1, 2015 is going to be worth more than that same $50,000 due on January 1, 2025.
Secondly, the actual amount of your future payments is certainly a factor. Obviously the more you sell, the more you'll receive in a lump sum payout.
1) The dates your future payments are due
2) The amount of your future payment
3) The discount rate being charged
Firstly, The date that your future payments are due is an important factor when determining how much your lump sum payout will be. This is called Present Value. Quite simply, the closer your future payments are to today's date the more they are worth. For example, a $50,000 payment due on January 1, 2015 is going to be worth more than that same $50,000 due on January 1, 2025.
Secondly, the actual amount of your future payments is certainly a factor. Obviously the more you sell, the more you'll receive in a lump sum payout.