“Compensation for damages that is not paid through a single lump sum, but is paid out over time through multiple payments. The structure is tailor-made for individual cases and may include an immediate payment to cover special damages. Typically, payment is made by purchasing an annuity from a life insurance company. Under IRC 104 (a)(2) code, structured settlement benefits are tax free. Cash may be received fro structured settlements by selling them to a broker who purchases annuities.