Structured settlements

A structured settlement is a type of annuity that provides a prize with a civil lawsuit for prolonged payment. A structured settlement often provides a better future guarantee of money than a payout. However, at the time of financial distress or when there are major life incidents, the payment of structured settlement can be removed for a lump sum amount.


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What is a structured settlement?

As a result of many lawsuits, some or some companies are paying someone to make a wrong payment. Those who are responsible for wrongdoing can agree with their settlement, or if they lose the case in court they can be forced to pay the money.


If the settlement is quite small, then the wrong party may have the option to get a one-time settlement. For large settlements, however, a structured settlement annuity can be arranged.

In this case, the at-fault party places money on an annuity, which is a financial product which guarantees regular payment from the insurance company over time.

In the structured settlement agreement, the persons paid are given a description of the series of payments which they would receive as compensation for the losses made. The long-term funding framework guarantees a better future for financial security because the same payment can be used immediately.


After the passing of the Periodical Payment Settlement Act by the U.S. Congress, the settlement of structured settlements gained popularity in the 1980s. According to the National Structured Settlement Trade Union, approximately $ 6 billion are issued annually in new structured settlements.


Frequently Asked Questions: Get a direct answer to the general questions about structured settlement annuity.


How do structured settlements work?

A structured settlement pays the balance outstanding from the legal settlement through periodic payments as a financial product known as a financial agreement. However, many legal settlements provide a one-time payment option, which once provides funds. The important differences between the annuity settlement options are long-term security and tax. For example, the money received from the case of personal injury is almost always tax-free when you receive it. However, once the money is yours, then you are liable for lump sum and dividends.


There are several reasons why a person can get structured settlements, the most common are:


Personal Injury: A personal injury case is a civil case, where someone has been hurt, the case seeking money from that person is considered to be responsible for the lawsuit. Money as a structured settlement helps in paying the recipient for medical expenses or other costs.

Compensation of workers: Most people are aware of the compensation of the workers, who are injured on the job while paying the laborers. The injured personnel is unable to work and during the other expenses, payment can be made for medical treatment and wages replacement.

In this example, families of injured patients or dead patients can sue for medical malpractice.

Wrong Death: A structured settlement is also a common way to compensate a person’s family whose death was a false death claim. Families may be entitled to receive a section of tax-free payment to replace the loss of income earned by lost loved ones.


Structured settlements – or structured annuity – are both financial products and legal decisions. Although they work somewhat like personal property, they are also subject to complex rules. Learn about the process of getting legal protection and benefits awarded to structured settlement recipients along with a structured settlement annuity through the following pages:


Structured settlement payment option: Compare different methods of accepting cash settlement from the lawsuit and vice versa.

Government assistance for structured settlements: Learn about how the government uses the tax code to promote the use of structured settlements.

Structured Settlement for Minors: Why this kind of settlement is usually used in issues related to weaker children.


Structured Settlement Professionals and Cons


Structured annuities are suitable for many different types of cases. However, once in place of conditions, they can not be changed. For additional information about how structured settlements work, payment options, or how to use your cash awards before the annuity contract schedule, the structured settlement FAQ page can be a beneficial resource within your search.


There are many benefits to getting structured settlement payments. It is important to understand the benefits with risks when deciding on any financial investment.




Structured settlement payments are tax-free.

In the event of premature death of the recipient, the nominee of the contract can receive guaranteed tax-free payment in the future.

Payment can be made for almost any time and can be started immediately for many years as per the requestor can be postponed. They may include a one-time payment or profit increase in the future.

Spreading payments over time can lead to the temptation to give big, extraordinary purchases and future income guarantees. This is especially helpful if the recipient has a medical condition for which long-term care is required.