According to National Structured Settlements Trade Association (NSTTA), structured settlements have become quite a common aspect of worker's compensation and personal injury claims here in the United States. If you don't have sufficient information about this type of claim, simply, it is dispersion of financing for legal claims wherein all or a portion of the arrangements require future periodic payments. Money is paid regularly as dictated in certain installments which could either be annually, semi-annually or quarterly.
The whole process takes into effect when a plaintiff finally settles a case for large sums of money; a proposed financial planner proposes paying in recommended settlements over a time period rather than provide payment in one fixed sum. Payments can last over a period of time or extend to the life of the claimant, and payment can also change depending on the claimants needs. This includes immediate payment in order to cover for special damages; payments are usually made through purchases from an annuity from life insurance companies.
A vital advantage that comes with having this process is the tax avoidance, when it is set up in an appropriate manner, it can significantly reduce a plaintiff's tax obligations. You can almost be ensured that structured settlements will provide funds which can pay for future cares and needs. One downside to structured settlements is a built-in structure, and you might not like having to follow a restricted mode of payment.
You might want to purchase a home or some expensive equipment, but you'll be lacking funds because of how your own little system works. This sticks you to an unwarranted situation until the next stack of payments arrive. Also, structured settlements don't work hand in hand with investing. A lot of standard investments give long-term return than with annuities provided by this system, so you'd be better off opting for a lump sum settlement.