by John Darer CLU ChFC MSSC RSP CLTC
Nice write up on Time Value of Money ("TVM") by Andrew Cravenho on the Settlement Quotes Factoring blog which explains how TVM relates to investing and in particular structured settlement factoring. His conclusions are well worth noting.
"Structured settlement factoring is based upon principals (sic.) of time value of money. Is it better to wait years for your money, or to get your money now? The simple answer to this question is that it is better to wait for your money due to the discount rates applied to a structured settlement factoring transaction. The more complex answer is (the answer to the question) “why” do people need cash now for their future payments? Structured settlement factoring is setup for individuals who are in desperate need for money, not for individuals who have other options besides factoring their settlement payments.
It is always best to consult with a qualified and credentialed financial professional before cashing out a structured settlement or annuity policy. A financial professional will be able to help you find other options, if available, and if not available will be able to help you complete the process of factoring a structured settlement."
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