Structured Settlement

A structured settlement is an agreement between the defendant and plaintiff to provide periodic payments of damages over a specified period of time. The settlement is usually financed by purchase of an annuity. The annuity is usually purchased from an annuity insurance company.

A structured settlement is usually considered when there are long-term medical or income needs because of significant disability or where the plaintiff would have difficulty managing large sum awards. It may involve up-front cash to cover costs before the settlement and then periodic payments for medical expenses, income, and educational costs. A properly designed structured settlement flows tax free to the plaintiff. It provides lifelong financial security, taking advantage of the increasing investment value of the money deposited for the settlement over time.