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What Is a Structured Settlement?

Structured settlements* are an innovative and proven method of compensating injury victims in legal settlements. Encouraged by the U.S. Congress since 1982, a structured settlement is a voluntary agreement between the injury victim and the defendant.

A structured settlement is a stream of periodic payments paid to an injured party by the defendant primarily through the purchase of annuity (fixed and determinable) issued directly by highly rated life insurance companies. Other funding options include the purchase of United States Treasuries or more rarely, the defendant has the option to self-fund the periodic payments. Structured settlements provide victims of physical #injury and wrongful death lawsuits security and guaranteed long-term income tax-free payments. U.S Congress enacted the Periodic Payment Settlement Act of 1982 (Public Law 97-473), which formally recognized and encouraged the use of structured settlements in tort physical injury cases.

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