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How does it work?
We will buy some or all of your payments for a discounted lump sum.
Why a dollar is worth more today than tomorrow?
A portion of the money you are getting in the future is interest that hasn't been earned yet. The insurance company is
simply paying you the interest on the money they invested when you settled your case. The 'amount' of the settlement (ie.
the sum of all the future payments) includes a great deal of interest that hasn't been earned yet.
Consider the following: It is an axiom that the further in the future you are expecting to receive a sum of money, the
less it is worth today, in part because of inflation. Inflation will make the value of the payments shrink in coming years.
In other words, the longer you wait, the less value or buying power your money has, due to inflation and the economic
conditions. So, to refer to that as the "Time Value of Money", immediate cash is more valuable than the money you
could receive in the future!
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