Structured Settlements

A Structured Settlement is a method of paying damages to a plaintiff (injured party) over a period of time when a lawsuit is settled.

Personal injury cases typically are a result of:

  • Product liability
  • Motor vehicle collisions
  • Wrongful death
  • Medical malpractice
  • Class action awards

In such cases, the parties involved often agree to have damages paid over a period of years rather than in one lump sum. The damages are usually funded in the form of an annuity contract issued by an insurance company.

Structured settlement annuities differ from other types of annuity payments in that they are not subject to income tax. This factor lessens the complications involved in purchasing them and makes them more accessible to an investor or funding source.

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