If you own a typical permanent life insurance policy (lifetime coverage) and did a straight
present value calculation of the premiums you can expect to pay during your lifetime, the total will be less than the death benefit.
It is important to retain an experienced law firm that has significant expertise with the financial issues involved in Divorce, including property division, the valuation of assets, spousal maintenance (alimony), real estate issues, cash flow schedules, balance sheet preparation, debt division, business valuation,
present value calculations for pensions, the analysis of retirement accounts and various tax issues associated with Divorce.
There is an interesting case study and net
present value calculation to...
It's called a net
present value calculation.
To do this, we simply did
a present value calculation assuming 3 %.
This should be intuitive if you think about
a present value calculation — when you change the discount rate used on a stream of future cash flows, the longer until a cash flow is received, the more its present value is affected.
And when interest rates are low, like they are now,
present value calculations are high.
Interest rates are important when determining
any present value calculation, including those used by pension plans.
There is an inverse relationship between interest rates and
present value calculations.
That is, when interest rates are high,
present value calculations are low.
Perhaps their economists too would do a net
present value calculation that would tell them that selfishness is the way to go.
Lastly, the Court noted it is inappropriate to conduct
a present value calculation when considering the costs consequences of a historic formal settlement offer.
To do this, we simply did
a present value calculation assuming 3 %.
To do this, we will use
a present value calculation of what the spouse's half of the future payments would be worth as a lump sum today.