You may be offered a "structured settlement" in an injury claim.  Careful consideration should be taken before deciding if such a settlement is right for you. 

A structured settlement is an alternative to getting your money all at one time.  There is generally a provision for a lump sum payment up front and then periodic payments for some period of time.  The periodic payments are generally monthly.  Often there is provision for additional lump sum payments after a certain number of years.  for instance, the agreement may call for $60,000.00 up front, monthly payments of $1,200.00 guaranteed for 20 years with an additional lump sum payments of $5,000.00 after 5 years and $10.000 at the end of 10 years.  The insurance company for the person who caused the injury will fund this settlement by purchasing an annuity. 

When figuring the actual value of the settlement, you need to know the current value of the annuity.  The total amount of the money that you will have received at the end of the 20 years will be more than what the insurance company will have to pay for the annuity. 

Structured settlements can be a good choice, especially where children or young adults are going to receive more money then they can really be trusted to use wisely. 

There are concerns and risks associated with structured settlements.  How financially secure is the company that will be financing the annuity?

What happens if you need the money before the annuity is obligated to pay you? 

What if you die before the annuity has been fully paid out? 

There are companies that will give you money today if you assign your settlement to them.  You need to carefully evaluate what they are offering.  Some can be a big help.  Others will take advantage of you.