Mesothelioma Illinois

You’ve made up your mind to sell some or all of the payments from your structured settlement. Maybe you need the cash to help cover a home purchase or to pay off medical bills. Or perhaps there’s an investment opportunity you wish to pursue. Whatever the reason – you need money now.

Before you sign on the dotted line, you should understand that by selling structured settlement payments for a lump sum payout, you will receive less than the total amount of your payment stream.

Of course, the amount of money you receive for your payments from a structured settlement buyer depends on several factors.  One of the most important is the “discount rate.”  The discount rate is essentially a fee applied by structured settlement buyers to your future payments to help them cover the cost of their services and maintain a profit. This is why, when you sell your structured settlement, the settlement lump sum you receive is less than the total payments you would have gotten over time.

The discount rate is calculated using a formula by which the present value of your future payments is determined. It’s a complex bit of math because it takes into consideration the time value of money.  As everyone is painfully aware, the value of a dollar today is worth more than a dollar tomorrow. This factor must be considered when determining the discount rate for a structured settlement transaction.

Today, consumers can expect to pay discount rates of between 8 and 20 percent; the average is around 14 percent.

That’s quite a spread – and one reason that it is smart to do some comparison shopping to solicit competing quotes from several structured settlement buyers. As a consumer, you have the right under state and federal statutes to full disclosure of the discount rate that will be applied to your transaction as well as any other fees that may be charged and the purpose of such fees.

Structured Settlement