Litigation glossary

Structured Settlement

A settlement paid as a stream of future payments through an annuity instead of one lump sum. For physical-injury claims the payments are entirely income-tax-free — including the growth.

ANNUITY PREMIUM (2024, RECORD)

$9.55B

As of Dec 31, 2024

View source

Under IRC sections 104 and 130, personal-injury settlement payments structured through a qualified assignment are tax-free to the claimant. The structured-settlement annuity market hit a record $9.55 billion in premium in 2024.

Structures protect long-term needs but create a secondary risk: factoring companies offering 'cash now' for your future payments at steep discounts. Forty-nine states require court approval before those transfers — see settlement factoring.

Sources & attribution

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