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In Structured Settlements Discount Rates Matter

The reality of today’s economy is that many household budgets are stressed. One way to alleviate some of that stress for those receiving periodic payments under a structured settlement may be to sell their future payment rights in the secondary market for a lump sum payment. There is a clear legal process in place making it possible to sell future payments in return for a lump sum to be paid after court approval as directed by federal law and associated state-specific transfer statues.

 

The fact is, the lump sum offered today for future payments will be less than the future sum of those payments. How much less is determined by the discount rate, which drives present value. One of the top structured settlement industry authorities, Annuity Transfers’ Brandon Black, has recently posted a clear and easy-to-understand explanation of the discount rate and its effect on your lump sum offer.

 

Mr. Black also connects the dots between your lump sum offer and the underlying discount rate to the final approval (or denial!) of your sale by a judge. His post explains the role of the discount rate in your lump sum offer and provides some simple, but valuable tips on how to evaluate your lump sum offer in order to provide the best possible chance your sale is approved in court.

 

Source: WiredPRNews

 

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