An agreement to settle a personal injury or wrongful death or environmental claim based on money to be paid upon settlement together with the promise of future periodic payments specific as to amount and timing. Plaintiff's claims are released in exchange for the promise by the defendant to make payments to the plaintiff. A structured settlement may or may not also include an up front, immediate cash payment at settlement. It is assumed that all such structured settlement payments will be tax free to the plaintiff under Internal Revenue Code (IRC) § 104(a)(2).
Payment for a personal injury claim where the settlement is paid over time on an agreed-to schedule rather than in a single lump sum.
Personal injury claims used to be settled merely by exchanging a sum of money for a release of the claim. In contrast, a Structured Settlement goes beyond an immediate cash payment and provides future payments "structured" over time to meet a person's ongoing financial needs. A structured settlement may provide payments for a certain period of time or extend throughout the lifetime of the injured person.