Key Terms & Definitions
Annuity
A financial product that provides regular, periodic payments. In structured settlements, annuities are issued by insurance companies to fund the settlement.
Beneficiary
A person or entity entitled to receive payments from a structured settlement or annuity.
Court Approval
A legal process required to sell or transfer structured settlement payments. A judge reviews the sale to ensure it is in the seller's best interest.
Discount Rate
The interest rate used to determine the present value of future structured settlement payments when selling them for a lump sum.
Independent Advisor
A court-appointed professional who reviews the sale of a structured settlement to ensure it is fair and in the seller's best interest.
Lump Sum
A single payment of money, as opposed to a series of periodic payments.
Obligor
The party responsible for making structured settlement payments, usually an insurance company.
Payee
The individual entitled to receive payments from a structured settlement.
Purchase Price
The amount offered to the seller in exchange for the right to receive future structured settlement payments.
Qualified Assignment
A legal arrangement allowing the transfer of structured settlement payment obligations from the defendant to an assignment company.
Settlement Agreement
A legal contract outlining the terms of a structured settlement, including payment amounts, schedule, and conditions.
Structured Settlement
A financial arrangement in which a claimant receives periodic payments over time, typically as a result of a lawsuit or insurance claim.
Transfer Petition
A legal document filed in court to request approval for the sale or transfer of structured settlement payment rights.
Underwriting
The process of evaluating the risk and terms involved in purchasing structured settlement payments.
Common Glossary Questions
Related Resources
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