A structured settlement is one in which the money for a legal claim is paid through arranged periodic installments. This is done either annually, semi-annually, or quarterly over a specified length of time. This settlement often includes immediate payment of specific damages and is usually made through purchasing an annuity from a life insurance company. A structured settlement can provide a lifetime fo financial security to injury victims and their families. They were first used during the 1970s as an alternative to lump sum payments and have been increasing in popularity ever since.

A structured settlement works when a plaintiff settles a case in which s/he receives a large sum of money. It is during this time that the attorney suggests a settlement to be paid in installments rather than one large sum over time. The amount is determined by the type of injury and the victims medical and other living needs. These needs are then calculated and an annuity is purchased where payments are made to the person in question.

This structured settlement comes with several different benefits. For example, the payments are completely tax free as well as the annuity. This means that the individual receives more money and can avoid paying high taxes, reducing the tax obligations completely. It also is beneficial because it can last a lifetime, creating a newfound sense of financial security without any worry about how the individual’s needs will be met down the road. In addition, you can always sell your structured settlement for a large sum of cash down the road if the desire arises.