Who Is Our Structured Settlement Calculator For?
Our structured settlement calculator is designed for people who have a structured settlement and are considering selling all or part of their payments for a lump sum of cash. This may include people who have inherited a structured settlement or people who just agreed to a structured settlement to resolve a civil lawsuit.
Our structured settlement calculator can help people with an estimate of what all or part of their future payments may be worth if they choose to sell the rights to their future payments.
I had a car accident in my early 20s and received a settlement. As fortunate as I was to receive a settlement, I wish that I had known about other options to consider with my settlement. Understanding the options and the value of my settlement upon selling it would have made it much easier to make an informed decision.
If you have a structured settlement and are curious of the value of the settlement as a lump sum to be received today, try the Structured Settlement Calculator. It will help you to make an informed decision.
Timothy Li, MBABusiness Finance ManagerTimothy Li, MBA, has dedicated his career to increasing profitability for his clients, including Fortune 500 companies. Timothy currently serves as a business finance manager where he researches ways to increase profitability within the supply chain, logistics and sales departments.
What Structured Settlements Are You Allowed To Sell?
Structured settlements are typically paid out through annuities issued by insurance companies. You can sell any monthly payments you receive from an insurance company, with limited exceptions.
- Income for Life
- Intended to balance your current and future expenses. Income for life annuities is paid over your anticipated life expectancy and passed on to your beneficiary if you die before the final payment.
- Deferred Defined Benefit
- Postpones the beginning date for receiving settlement payments.
- Index-Linked
- Linked to the growth of the S&P 500 index, but can only increase by 5% each year.
- Joint and Survivor
- A single settlement contract is provided for many, frequently related, individuals.
- Step Annuity
- These adjust for inflation over time so that your payment rises in sync with your expenses.
- Term Certain
- Payments are made in unequal installments over a specified time period.
- Time Certain or Period Certain
- Paid in equal installments over a specified number of years.
Some Types of Structured Settlement Annuities You Can Sell
Our Calculator Works With Other Income Sources
While this calculator is designed to estimate how much your structured settlement is worth if you sell all or part of it, it also works with annuities.
Because of this, our calculator can also be used to estimate the value of other income streams.
Examples of Other Income Streams You Can Calculate
Structured Settlement Calculator Limitations
While this calculator can help you get started selling your structured settlement, it may overlook some characteristics unique to your structured settlement agreement.
The calculator functions with a set of fixed assumptions, including a 9% discount rate. Other aspects of your settlement must fall between certain minimums and maximums for the calculator to function correctly. If your structured settlement doesn’t fall within these parameters, please email or phone us to receive a tailored quote.
Parameters of Our Structured Settlement Calculator
- Minimum number of months: 60
- Maximum number of payments: 500
- Minimum amount of total value: $25,000
- Maximum amount of total value: $1,000,000
- Discount rate: 9%
Changes to any of the input values, including selling a portion of your payments, will affect your cash-out value. If your terms change after you use the calculator, please call to update us.
How Much Is My Settlement Worth?
How much your settlement is worth depends on several factors. Our structured settlement calculator evaluates the time, interest and long-term value of your settlement.
The amount may be lower than you expected based on the value of your future payment stream. This is because buyers charge a discount rate, calculated as a certain percentage of your settlement’s overall value and deducted from the final offer, when buying your structured settlement.
3 Ways To Sell Your Structured Settlement
There are three ways to sell your structured settlement: selling the full settlement, selling a part of the settlement or selling a percentage of each future settlement payment. How much you may receive varies depending on which type of sale you’re interested in.
- Full Sale
- You’ll get the most money upfront by selling your entire settlement, but you’ll also forfeit any further payments. The risk associated with choosing this option is that you could spend the money quickly and no longer have a guaranteed payment stream to fall back on in the future.
- Partial Sale
- A partial structured settlement sale involves selling a specific number of your future payments, but not the entire settlement value. This option allows flexibility: it gives you access to a lump sum of cash while still preserving some long-term financial certainty.
- As a Percentage of Each Future Payment
- If you sell a percentage of your monthly payments — for example, half of each payment for the next five years — you will receive a lump sum while continuing to receive half the value of your payments over the next five years. At the end of those five years, any remaining payments revert to the full amount.
Structured Settlement Sale Options
Factors Impacting Your Settlement’s Worth
When determining the value of a structured settlement, buying companies consider factors including its present value, discount rate and the frequency of payments.
The present value of a structured settlement relies on the concept of the time value of money, which states that money has more worth today than in the future. This concept is based on factors such as inflation, which can erode value over time.
The discount rate is the percentage of the structure settlement’s value the buyer charges to cover the costs of doing business and allow them to make a profit. This rate is often between 9% and 18%. The higher the discount rate, the lower the present value of your annuity.
The amount of each payment is also a factor. The higher each individual payment is, the higher the present value of your structured settlement will be. This ties back to the time value of money — because the payments are a higher amount, they are worth more in today’s dollars.
Meanwhile, a shorter length of time between payments — for example, receiving them monthly instead of annually — correlates to a lower present value for a structured settlement. This is because long periods of time between payments mean the settlement can build more compound interest.
What Is the Process for Selling My Structured Settlement?
The process of selling a structured settlement typically takes 45 to 90 days and requires court approval. It is relatively simple and can be completed in five general steps.
- Step 1: Determine your needs.
- Answer these essential questions: What is my reason for selling? How much money do I need? Should I sell the entire settlement or only a portion?
- Step 2: Research potential purchasing companies and compare quotes.
- Do your research. You have many purchasing companies to choose from, so due diligence is necessary to make sure you choose a trustworthy buyer. Most offer free quotes to help you determine the number of payments you would have to sell to get the amount of cash you need. Our structured settlement calculator will give you a reference point with which to compare your options.
- Step 3: Complete the paperwork with the help of your attorney.
- An attorney can help you navigate any legalese and file the necessary documentation with the court.
- Step 4: Gain approval from a judge.
- Structured settlements stem from litigation, so a court hearing is required before you can sell your structured settlement. The judge’s role is to ensure the sale is in your best interest.
- Step 5: Receive your money.
- After receiving the judge’s approval, the purchasing company can finalize the sale and send you your payout.
Steps for Selling Your Structured Settlement
Learn more about the process in our free Guide to Selling Your Structured Settlement Payments.
Structured Settlement Payout Calculator FAQs
Structured settlement calculators can provide an estimate of how much your settlement is worth, but there are multiple factors that affect how much a factoring company may actually pay for your settlement. While a calculator will give you an idea of what to expect, consider offers from several potential structured settlement buyers to get the best price.
A structured settlements calculator can provide you with some useful information, but it cannot address all the terms of every settlement. It’s important to consider terms and conditions that may be specific to your settlement.
By giving you a rough estimate of what your structured settlement is worth, a structured settlements calculator may give you a better idea about whether selling it is worthwhile. It can give you an idea of the lump-sum payment compared to the long-term income stream of your settlement.
