Structured personal injury settlements are the legal agreements between two different parties where one party pays over a specified time to the other one. These settlements generally occur in the case of any personal injury. An insurance company pays the injured party through annuity payments. This is done while releasing a defendant from liability. The insurance company and their affiliates guarantee payments in the structured settlements.

Structured settlements are tax-free when they fund any personal physical injury claim. Structure settlements are also used for non-personal injury claims. There are various criteria that have to be met for the structured settlements, as far as they are relevant to your personal injury claim.

If the loss amount is much more than $10,000 then there is an opportunity to defer some of your payments for more than three years of time. When the injured party feels more secure with the steady payments inherent in structured settlement, or when the injured party feels uncomfortable with managing large sums of money all at once, a structured personal injury settlement is the best route.

In workers compensation cases, cases in which the person has died, or cases for which the court has already awarded damages, structured settlements are not possible. Payments in the structured settlements are classified into two components. They are the initial cash payment and the periodic cash payment. Initial payment provides some part of money for the immediate need, while the periodic payment is the one in which the payments are done many times over a specified time.

In general, structured settlements can be paid under a structured settlement agreement. Based on this agreement, an injury victim only receives the payments in periods and not in lump sum. The payments are tax-free. They help to meet the victims future basic needs and medical expenses. Settlements provide better tax advantages than fixed annuities. Liability is removed from the defendants record.