Understanding Personal Injury Structured Settlements: How They Work and Why They’re Beneficial 

A Personal Injury Structured Settlement is a way to receive money after winning a personal injury case (like from an accident or injury caused by someone else). Instead of getting all the money at once, one can “Structure” the recovery to be paid over time.

Here’s how it works, step by step:

1. You win or settle the case: Someone agrees to pay you money for your injury;
2. The money is set up as a structured plan: Instead of one big lump sum at the time
of recovery, the money is spread out into future, larger payments;
3. You get regular payments: These payments might come by way of “lump sums”, or come every month, year, or however the plan is set.

In this case, the insurance company of the person at fault pays all or a portion of the
recovered sum to a highly rated Annuity Company, like MetLife, Pacific Life, or
Transamerica. The Annuity Company then guarantees the rate of return on the funds over
time. Currently, a close to 6% return is possible. The Structure can be created to pay out
in any way you like. For example, “Structures” work particularly well where the person receiving the personal injury recovery is a minor (under 18 years of age). In that case you can Structure the Personal Injury recovery to i) pay one lump sum when the minor reaches a certain age, ii) pay several lump sums as the minor reaches certain ages, or iii) pay monthly sums for a period of years beginning when the minor reaches a certain
age. Structure lump sums can be timed to coincide, in the future, with the time the minor
will need funds to pay for college, or for a future time when the minor might be
considering a home purchase. The “Structure” possibilities are endless.

An additional major benefit of a Structure is that the return on investment is Income Tax
Free.