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The Process of Structured Settlements in Personal Injury Cases

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Accidents are commonplace in the bustling Bronx, one of those boroughs often vividly depicted on the silver screen. When personal injury strikes, it swiftly ignites a domino effect of challenges, plunging the victim into emotional distress, financial worries, and legal intricacies. Amid such turmoil, it's paramount to understand the structured settlement process to swiftly and effectively secure rightful compensation. If you've recently suffered a personal injury and seek guidance in its aftermath, this blog is geared toward you.

The best thing for victims to do after seeking medical assistance is to visit this personal injury lawyer's site and consult competent legal aid. Professionals in the domain have the expertise and can provide accurate case-by-case assessments of the restitution process. However, before you reach out to a lawyer, learning more about the nuances of the settlement process will be beneficial. The following sections unpack secured settlements and how they apply to personal injury cases.

What is a structured settlement?

A structured settlement is an agreement between two parties where the defendant agrees to pay the injured party over time instead of a lump sum upfront. The terms and conditions of these payments are set out in detail and typically involve periodic payments that continue until some specified event or date.

Why choose a structured settlement?

    • Steady Income: For those who have suffered debilitating injuries or disabilities, regular monthly payments from a structured settlement can provide stability and certainty, making planning for long-term care expenses easier while maintaining financial security.

    • Tax Benefits: Structured settlements also offer significant tax advantages because they are tax-free under federal law as long as they meet specific criteria in the Internal Revenue Code. In contrast, any interest earned on invested funds received through lump-sum payouts is subject to taxation.

    • Reduced Risk: Because there is no risk associated with investments or market fluctuations when receiving monthly payments from structured settlements, recipients have less concern about running out of money before insurance coverage runs its course.

How does the process work?

Once an agreement has been reached regarding liability, damages, and other trial preparation matters such as competent evidence discovery, one or both parties may propose structure-based solutions. These solutions could involve deferred annuity plans instead of traditional cash-out options through installment contracts. The parties may prefer to resolve the matter privately without involving court trials. Alternatively, they may formally present the relevant documents to a judge for approval if they believe the agreement is fair and equitable given the circumstances.

The amount to be paid annually is crucial in deciding whether to agree on a structured settlement. A financial planner can assist in calculating this amount. They have expertise in tax concepts and can help insurance companies and claimants optimize payment structures by considering taxation rules.

In addition, some individuals use legal funding services as intermediaries when considering settling injury claims through structured settlements. This is because of the technical issues involved, which require input from professionals. This helps all parties make informed decisions for the best possible outcomes without causing financial strain unless necessary.

The final steps include creating an annuity contract, depositing funds, and selecting beneficiaries. These steps are based on the agreed structure between the parties involved in these programs. It is important to periodically review the payment schedule to ensure its accuracy, similar to other agreements. Some modifications to the product may be allowed, but only with prior court authorization.

Additionally, it is crucial to carefully draft legal provisions that specify when injury-related payments will cease. A judge must fully endorse these contracts during court hearings for them to become enforceable under the current laws that govern such matters in all jurisdictions within the United States.


Structured settlements represent a vital and thoughtful approach to resolving personal injury cases. This well-defined process offers a range of benefits for both plaintiffs and defendants, providing financial security and stability for the injured party while offering cost-effective solutions for the responsible party. Through careful negotiation and legal proceedings, structured settlements ensure that the injured individual's future needs are met, guaranteeing long-term medical care, rehabilitation, and overall well-being. By embracing this method, the legal system demonstrates its commitment to achieving fair and equitable outcomes, fostering a sense of closure, and facilitating recovery for those affected by personal injuries