Structured Settlement Calculator
Calculate the present value of your structured settlement payments. Compare lump sum cash-out offers against keeping your guaranteed income.
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Understanding Structured Settlement Valuations
What Determines Your Settlement's Value?
The present value of a structured settlement is determined by the time value of money — a dollar today is worth more than a dollar in the future. Key factors include:
- Payment amount and frequency — larger, more frequent payments have higher present value
- Years remaining — longer payment periods have lower present value relative to total
- Discount rate — the buyer's required rate of return (higher = less money for you)
- Cost-of-living adjustments — COLA increases boost present value
- Payment certainty — guaranteed payments from insurance companies are more valuable
Average Structured Settlement Buyout Rates
When you sell a structured settlement, you typically receive 60-80% of the total remaining payments. Here's what to expect:
- Best offers: 75-85% (short-term, 1-5 year settlements)
- Average offers: 65-75% (medium-term, 5-15 years)
- Lower offers: 50-65% (long-term, 15+ years)
- Life contingent: 40-60% (payments tied to your lifespan)
The gap between what you receive and the total payments represents the buyer's profit, risk premium, and administrative costs.
The Structured Settlement Protection Act
All 50 states have enacted versions of the Structured Settlement Protection Act, which requires court approval before any structured settlement transfer. This protects payees from predatory buyers. The court must find that the transfer is in the "best interest" of the payee and their dependents. A judge reviews the discount rate, the payee's financial situation, and whether the payee received independent professional advice.
When Does Selling Make Financial Sense?
While financial advisors generally recommend keeping structured settlements, there are situations where selling some or all payments may be appropriate:
- Medical emergencies — urgent healthcare costs that can't wait
- Debt elimination — paying off high-interest debt (20%+ credit cards)
- Home purchase — down payment that would save more in rent than settlement payments provide
- Education investment — degree that would significantly increase earning potential
- Business opportunity — starting a business with strong ROI potential
Tax Implications of Selling a Structured Settlement
If your original structured settlement was from a personal physical injury case, the periodic payments are tax-free under IRC Section 104(a)(2). When you sell those payments for a lump sum, the proceeds are generally also tax-free. However, the IRS imposes a 40% excise tax on the purchasing company under IRC Section 5891 if the transfer doesn't comply with state structured settlement protection acts — this cost is typically passed on to you through a lower offer. Always consult a tax professional before selling.
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By the CalcLeap Editorial Team · Updated April 2026 · For educational purposes only — not legal or financial advice