Structured Settlements

When a legal case settles for a large sum of money, a structured settlement may be used so that it may be paid over time instead of a lump sum. This device is often used in personal injury and workers' compensation cases. A defendant (or its insurance carrier) purchases one or more annuities to guarantee future payments to the injured person. Alternatively, the defendant may delegate its obligation to a third party who in turn purchases an annuity and makes payments directly to the plaintiff.