Compensation for damages that is paid out over time through multiple payments, rather than through a single lump sum. Because it is tailor-made for individual cases, the structure may also include some immediate payment to cover special damages. Payment is usually made by purchasing an annuity from a life insurance company. Structured settlement benefits are tax-free under IRC 104 (a)(2) code. It is possible to receive cash for structured settlements by selling them to a broker who buys annuities.