What is Structured Settlement?
Updated January 24, 2026
A settlement arrangement where compensation is paid through periodic payments over time rather than a single lump sum.
Understanding Structured Settlement
Structured settlements are funded by annuities and provide guaranteed income over years or a lifetime. They offer tax advantages (payments are tax-free) and protect against spending the money too quickly. They are common in cases involving minors or catastrophic injuries.
Examples
- 1Monthly payments for life after catastrophic injury
- 2Periodic payments for minor's settlement
- 3Tax-free annuity payments over 20 years
Related Terms
Loss of Consortium
A claim by the spouse or family member of an injured person for the loss of companionship, affection, comfort, and sexual relations resulting from the injury.
Punitive Damages
Additional damages awarded beyond compensatory damages to punish the defendant for particularly egregious conduct and deter similar behavior in the future.
Diminished Value
The reduction in a vehicle's market value after it has been damaged in an accident and repaired, compared to a similar vehicle that was never damaged.
Pain and Suffering
A category of non-economic damages compensating injury victims for physical pain, emotional distress, and diminished quality of life caused by their injuries.
Future Medical Expenses
The projected cost of medical treatment, therapy, medication, and care that an injured person will need in the future as a result of their injuries.
For Personal Injury cases
The record behind a term like this one is built by the client, not the file.
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