A structured settlement is a periodic payment plan that is agreed upon between a plaintiff and defendant. It is used in many cases where the plaintiff is awarded a large sum of money.

Instead of receiving the compensation in a lump sum payment, the payments are spread out over a period of time that is decided upon beforehand.

In cases involving personal injury, a structured settlement is especially helpful. If the plaintiff is temporarily or permanently unable to work, a structured settlement provides them with a sense of financial security. The claimant will have a steady source of income which makes financial planning much easier.

When a plaintiff wins a structured settlement in an injury claim or some other kind of tort case, they are not being awarded one thing; the plaintiff is actually being awarded a set of components that make up their structured settlements. Structured settlements come in a variety of shapes and sizes and it is important for you, as the plaintiff, to understand exactly what you are getting with your structured settlement.

The first part of your structured settlement may be upfront cash. This isn’t an annuity, but it is commonly included by the courts in a structured settlement to give the successful plaintiff a quick influx of cash to pay bills that may have been building up during the court proceedings.

While the first component of a structured settlement isn’t an annuity in any form, the rest of the settlement is in the form of an annuity. For example, part of your structured settlement might include a fixed annuity.