The legal term known as “Structured Settlement” is explained as a permanent settlement or an agreement between two parties, namely the plaintiff and the defendant to pay a certain amount of money, which is the compensation, in an installment pattern.

It is during a court case where the defendant has decided that he or she would provide the compensation in this manner. The only difference in the payment of the structured settlement payment is that the defendant will bear fewer responsibilities financially, rather than by paying the entire sum at once. This compensation is a time based payment method towards the plaintiff, and it has been decided by the defendant or his or her attorney to go ahead with the installments.

Another aspect of structured settlements points out towards something known as ‘structured settlement annuity’, which is commonly known as the guarantee by the defendant or the attorney that the installments decided to be paid will be executed duly on its precise time.

Now, the structure of payments of the compensation by the defendant towards plaintiff can be done by any known or decided method between the disputing parties. For instance, the payment of a particular amount of compensation towards the plaintiff can be paid out by the defendant for a certain number of years with X number of annual, biannual or quarterly installments. This has to be done under the vigilance and permission of the court, but the decision lies entirely with the two parties.

Turning towards advantages sought through cash structured settlement, one of the primary benefits hoarded by the plaintiff on the compensation received is the tax liability being eased off. Depending on the terms of payments through the structured settlement company, the plaintiff and the defendant can agree on the terms of the compensation and thus evidently making the entire process almost tax free in some cases.

It has also been seen in the past that structured settlement is always beneficial for plaintiff, especially when the subject is speaking on the terms of handling the sum of money received; we all know that everyone is not necessarily a good manager of finances.

There are some disadvantages too. It was noticed in some cases that if a plaintiff is having some future plans in respect to the money being received, there is always a notch here. For example if he or she is looking forward to pay some organization or person a huge sum of money against this compensation benefit, then he or she cannot do so for his or her compensation amount is being paid in installments instead of a lump sum. Another issue that arises is when the plaintiff is not a good manager of finances and is unsure of handling the compensation amount in a lump sum. That can spell trouble coming.

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