What is a Structured Settlement

Generally, a structured settlement can be defined as a settlement under which an injured party in a lawsuit for personal injuries agrees to accept a stream of payments in lieu of a lump sum as a settlement of their claim.  A typical structured settlement agreement generally is entered into before a case goes to trial. The structured settlement agreement is generally made by and between the injured party and the defendant’s insurance company.

Wherein, an injured party agrees to enter into a settlement agreement in exchange for the dismissal of the pending lawsuit. Pursuant to the terms of the structured settlement agreement, and in exchange for the dismissal of the lawsuit, the defendant’s insurance company agrees to make a series of payments over time to the injured party.

WHAT PAYMENT OPTIONS ARE AVAILABLE TO PERSONS THAT AGREE TO STRUCTURED SETTLEMENTS

Also, because injured persons have differing needs for money and medical care depending on the nature of their injuries, structured settlements are set up in many ways, with payments to be made to the injured party:

(1) On a monthly basis;

(2) In lump sums;

(3) Through a combination of both monthly and lump sum payments;

(4) Can extend up to the life of the claimant, commonly known as “life only”  payments in the insurance industry); and

(5) In many case, even beyond the “lifetime” of the injured person, where the payments    will still continue to be made to the Estate and heirs of the injured person. Such payment       stream arrangements are commonly referred to as “guaranteed payments” in the insurance industry.