Do Structured Settlements Earn Interest?

A structured settlement is a stream of tax-free payments paid out over time rather than one lump sum. You can either receive structured settlement payments immediately or earn interest by taking them at a later date.

How are structured settlements paid out?

When the defendant and the plaintiff in a lawsuit agree to settle a claim with a structured settlement, the parties negotiate a cash amount payable by the defendant in exchange for the plaintiff dropping the lawsuit. The money is distributed as a series of periodic payments, typically funded through an annuity.

What are the benefits of a structured settlement?

Structured settlements are great options for many different cases, such as personal injury lawsuits, mass torts, and more. They often help speed up the conclusion of a lawsuit. A structured settlement provides stable life-long income with built-in budgeting and minimal taxations.