Aside the legal and accounting jargon associated with structured settlement questions, this article and, in fact this blog, is an extremely simple way to understand it: Let's imagine you've filed a lawsuit against an asbestos company after you've been diagnosed with mesothelioma - that is, cancer of the mesothelium (mesothelioma is widely associated with asbestos ingestion). Don't get over hyped about this, we are only SUPPOSING. Then, let's suppose you won the case or the asbestos manufacturer decides to settle with you out of court. That would involve paying you a certain amount as damages (let's say $10,000,000). Ordinarily, this should be paid to you as a lump sum. But a practice that has become popular is to pay you an installment amount periodically. This installment payment will usually be paid according to a certain structure or a complex arrangement of different structures (if you like, call it a plan). It could be that the asbestos company would be paying you say $1000 every week or $5000 every month or $50,000 every year. Whatever it may be, the term 'structure' is used to apply to it. Well, you are already being settled according to a structure. Are you still asking, 'what is structured settlement?' That's it.
Structured settlement has become a real area of business and finance as well as for countless and complex legal and accounting practices. Creating a particular plan for a deal is the work of attorneys, accountants, tax and other financial experts. This is generally termed 'structuring'. A claimant or the receiver of a structured settlement can decide to sell it for a lump sum. Thus it becomes a commercial world where you see ads like 'sell or buy structured settlements'. Such an offer is generally called a product just like any other thing on sale, thus we talk of 'structured product' and 'structured credit' as well as 'structured investment'.
The payment of structured settlement usually involves the payer buying an annuity from an annuity company. This is a means of placing a value on the structures agreed on. Thus, an entire organizational structure turns out to arise from structured settlement issues. This is why it has become a major area of human endeavor.
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