What Is A Structured Settlement Payment

This series of payments is called a structured settlement.

What is a structured settlement payment. A structured settlement typically includes a lump sum of cash upfront one time to cover immediate expenses followed by guaranteed periodic payments tax free customized to meet the needs of the settlement winner. Factored settlement payments are the result of obligations to payout sporadic payments under settlement terms. These resolutions differ from lump sum settlements because of the way the money is paid over time. A structured settlement often referred to as a structured settlement annuity is a long term stream of payments to someone a plaintiff who has won or settled a civil lawsuit with a defendant.

A structured settlement is a settlement derived and negotiated from the result of a person or company winning a civil case. 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. Also the payments from factored settlements are tax free. One option is a structured settlement which includes periodic payments over time.

It s another often smarter way to receive a court award for damages other than a lump sum payment. Structured settlement payment rights can be bought in the secondary and tertiary settlement market. The defendant funds the settlement. If you re on the winning side of a lawsuit there are different ways to receive the money you re awarded.

Whether you should opt for a lump sum payment or a structured settlement will depend on many factors including your tax liability how you plan to spend the money and whether you need assistance in managing a large sum of money. The rates are affordable and combined with the need time continuum. A structured settlement can include a large lump sum payment upon termination of the contract. For more about brokers see national structured settlements trade association.

A child recipient may receive regular payments while they are a minor and then one large lump sum to pay for their college tuition when they graduate from high school.