Structured Settlement Buyer Accounting

Structured Settlement Buyer Accounting

Principles of finances govern how a structured settlement buyer prices the offer they make to buy your annuity payments from a lawsuit.  You may be curious how this works and what your “rate” is when selling future payments.  We think therefore it is helpful to provide an example that may serve as guidance at best and at the very least educate you by giving you enough information to ask the pertinent questions.

Getting More than 50 Cents on the Dollar for a Structured Settlement

Getting More than 50 Cents on the Dollar for a Structured Settlement

Because structured settlements vary so much it is hard to create an example that will be fully analogous to your situation. That said, the same principles set forth in the below example will translate regardless if you are selling monthly structured settlement payments or future lump sum payments.  Of course, other variables come into play and we caution you to shop around when receiving any offer from a structured settlement buyer.

With that preface complete, lets start with a person with a structured settlement payment due in 8 years that has a “face” value of $135,000. This imaginary structured settlement lump sum may be due from a host of annuity issuers like New York Life, Metlife, Genworth (a/ka GE Capital), Aegon (a/k/a Transamerica) or Pac Life (a/k/a Pacific Life).  For purpose of calculating the numbers below we will assume that today’s date is December 10, 2014.

Obviously, your $135,000.00 dollar lump sum structured settlement payment due in approximately 8 years (i.e, 2022) is not worth $135,000 and no structured settlement buyer can pay you the full amount of the face value of the payments notwithstanding its due date.  Instead, you have to assume you are going to receive a “discounted” amount in exchange for selling your structured settlement for cash today.  What is the discount? What will a structured settlement buyer pay you? What is the rate that is used to calculate an annuity buyout?  Well, we are going to provide you some information that may be helpful.

The rate that a structured settlement buyer offers to discount your payment buy will control how much they pay you.

1. 12% rate = Slightly over $60,000.

2. 10 % rate=  Slightly over $68,000.

3.  9% rate=  Slightly over $73,000.

As you can see, as the rate goes down, the purchase price or valuation of your structured settlement increases.  At a 10% rate you are looking at getting more than 50% of the face value of that $135,000 lump sum payment.  We are referring to effective rates in this article and not nominal rates.

At CSF, we strive get you the most amount of cash you have been offered for the sale of your structured settlement. Call us with your best offer and let us beat it

800-317-3769.

Structured Settlement Blog 2014 Update

Structured Settlement Blog 2014 Update

As many of you advised us, we had a technical glitch over the weekend that caused the blog to briefly stop showing on the homepage.  Of course, the blog continued to be operational but in order to view the content and the updates, one had to visit this page directly instead of viewing on the homepage. We apologize for the inconvenience and have (clearly) rectified the problem.

In light of this mishap, it probably is a good time to note the importance of staying current on market conditions when looking to sell a structured settlement for a lump sum.  Much like operating a blog or any undertaking that is affected by outside conditions, looking to convert a portion of a structured settlement for cash, requires you to be constantly on the look out for scenarios that may impact you.  When it comes to selling a structured settlement, maybe the most important thing to be weary of is the buyer you elect to go with and whether that buyer has the experience and knowledge to not only get you a lump sum but get you that cash in the most efficient manner.

As you may know it is relatively inexpensive to set up a website these days.  Godaddy offers websites and hosting for very little money annually and then all you need to do is pay a web designer to create a layout for you.  If a web designer merely utilizes a template, he or she may be willing to “create” a webpage for few hundred dollars.  What does this mean to you as a person looking to sell a structured settlement?

Figure Out the Best Move for You When Getting Cash for a Structured Settlement or Settlement Annuity

Figure Out the Best Move for You When Getting Cash for a Structured Settlement or Settlement Annuity

 It means you need to be careful that you are actually dealing with a group that has an actual background in buying structured settlements in the secondary market and is not just a marketing company that is looking to gather your information and sell it to another company.  While there is nothing fundamentally wrong with this set up, you, as the consumer, want to be aware of who and what you are dealing with.  To that end, it makes sense to talk to the person on the phone from the website you locate and ask some pointed questions about their experience.  At some point you will have to go with your gut and determine if moving forward and providing information about yourself and your structured settlement annuity seems appropriate.

At CSF, we never sell your information to 3rd parties and have been in the structured settlement buying industry for years. Call us if you want honest, straightforward answers

800-317-3769