What is the typical structure of a Structured Settlement?

A structured settlement typically involves a series of smaller payments made over time rather than a single lump sum. This arrangement allows the recipient to receive payments at designated intervals, which can help manage their finances over an extended period. The structure is often designed to meet specific needs, such as covering ongoing medical expenses or providing income for living expenses.

This method of settlement is especially useful for claimants who require long-term financial support, as it can offer stability and predictability in receiving payments. Unlike a lump sum that provides a one-time payment, structured settlements can be tailored to provide periodic payments that align with the recipient's needs. It also has tax benefits, as the payments are often tax-free under certain conditions.

In contrast, options like a single lump sum payment would not reflect the typical structure associated with structured settlements, which prioritize ongoing support. Payments made only in partial amounts or without full settlement don’t represent the nature of structured settlements, which are designed to conclude with a complete resolution over time. Additionally, while payments made in monthly installments may seem similar, structured settlements can include various payment schedules that are not limited to monthly intervals.