A structured settlement, simply put, is an installment basis payment of a lump sum amount owed to an individual. This could be in the form of damages from winning a case or cash benefits from life or medical insurance perhaps. In the finance world, structured settlements are used in different situations by different individuals and organizations.

One area of finance that is much easier to understand would be in getting insurances. Structured settlements are very visible in life insurance plans that individuals pay for. After payment for say a total of five years, depending on the agreement, plan holders will receive cash benefits. These said benefits are given by insurance companies through a series of payments over a period of time.

Structured settlements have its advantages and disadvantages for individuals receiving such. Investment in insurance plans doesn’t produce benefits until long periods of time. On the other hand, this is an advantage to an insurance company since it generates income through members’ periodic payments. After the period of payment, insurance companies will have raised enough money to pay out members’ cash benefits. The advantage of structured settlements to individuals though is safekeeping of their money.

On a larger scale, structured settlements are just one of the options that are offered by finance to people. This allows for individuals and companies to put money on their long term goals.