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FAQ for Trial Attorneys
  1. Introduction
  2. What is a Structured Settlement?
  3. Advantages to the Plaintiff
  4. Disadvantages to the Plaintiff
  5. Managing the Disadvantages
  6. Appropriate Cases
  7. Inappropriate Cases
  8. Case Size
  9. Why Annuities?
  10. Annuity Pricing
  11. Reduced Life Expect. Discounts
  12. What is an "Assignment"?
  13. Structure of the Deal
  14. Insurance Company Ratings
  15. The Closing Process
  16. What Settlement Brokers Do
  17. How Are SS Brokers Paid?
  18. If the Defense Has Their Own Broker, How will My Broker Be Paid?
Home Page > "How to" For Plaintiff Attorneys >ABC's

What Is A Structured Settlement?

A structured settlement, sometimes called a "structure", is an agreement in which an injured person agrees to accept a series of payments over time (as opposed to a single lump sum) from a defendant or insurer in return for a release of his or her claim. The name refers to the fact that payments are structured to meet specific needs.

The first payment is typically a check to cover attorney’s fees, liens, and expenses and to establish a cash reserve for the claimant. Future payments are backed by either U.S. Government bonds or annuity contracts from state-regulated life insurance companies*.

A typical structure might look like this:

$350,000 cash at settlement
$2,000 per month guaranteed for life,
not less than 30 years certain
$20,000 paid in year 5
$40,000 paid in year 10
$60,000 paid in year 15
$100,000 paid in year 20

*As required by tax law. See Internal Revenue Code Section 130