Structured Settlement Legal Meaning and Definition

Here is a simplified definition of the legal term Structured Settlement.

Structured Settlement (noun): Refers to a method of compensation where an individual who has won a lawsuit is paid in periodic payments, instead of a one-time lump sum. These settlements typically result from personal injury, wrongful death, or workers' compensation claims. The arrangement of payments is designed based on the individual's needs, which might include immediate cash for certain expenses, followed by regular, tax-free payments over a specified time. These settlements are often funded by annuities bought from life insurance companies. The owner also has the option to sell these payments to brokerage firms for cash.