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Structured Settlements

A Structured Settlement is a legal settlement paid out as an annuity rather than in a lump sum, usually with certain tax advantages for the recipient. Rather than receiving one lump payment, the party who won or settled the lawsuit would receive a stream of payments. The at-fault party puts the money toward an annuity, which is a financial product that guarantees regular payments over time from an insurance company. The structured settlement provides series of payments the person who was wronged will receive as compensation for the harm done to them. Spreading the money over a longer period of time offers a better future guarantee of financial security because a single payout can be spent quickly and typically the earnings gained are not taxed.