A structured settlement is a pact under which instead of a single lump sum, payments are made over a specified time in exchange for a release of liability. These liabilities may arise out of personal injury or other forms of compensation claim.

Depending on the nature, structured settlements can be spread over a person’s lifetime, or just over a few years. Most of such settlements include an immediate cash payment and are set up as an annuity generally orchestrated by insurance companies.

However, despite the attractive initial payment plan, a financial emergency, unforeseen medical expenses, or other compelling reasons can force many people to rethink the need for future payments.