By definition, a structured settlement is the payment of money for a personal injury claim where all or part of the settlement calls for future periodic payments. These periodic payments are funded through an annuity purchased from a major life insurance company or Treasury Bond Trusts. By using highly rated and well-known life insurers or United States Treasury Bonds, you can be assured of financial security throughout the period that the payments are due under the proposal.

Under a structured settlement, an injury victim doesn’t receive compensation for his or her injuries in one lump sum. Rather, he will receive a stream of tax-free payments tailored to meet future medical expenses and basic living needs.

This "structured settlement" definition also includes lottery winnings, annuities, military pensions, etc.

Structured settlements most often only offer small monthly payments. Many times the recipient would prefer a larger lump sum of their cash to handle an unplanned financial emergency, bill consolidation, purchase a home, or to meet any other financial requirements that may arise.