Structured Settlement Glossary
Definitions provided for general understanding only.
- Annuity
- Insurance product that guarantees periodic payments.
- Discount Rate
- The percentage used to convert future payments to a present-value lump sum.
- Factoring Company
- Third party that purchases structured-settlement payment rights.
- Qualified Assignment
- A transfer meeting IRS §130 requirements, allowing tax-free funding of the annuity.
- Life-Contingent Payments
- Payments that continue only while the payee is alive.
- Court Approval
- Judicial review required in all 50 states before a sale can proceed.
- Payee
- The individual entitled to receive the structured-settlement payments.
- Lump-Sum
- A single cash payment that replaces future periodic payments.
- Settlement Protection Act
- State statute governing the sale or transfer of payment rights.
- Structured Settlement
- A series of tax-advantaged payments resulting from a legal settlement.
- Prudential Structured Settlement
- An annuity-backed payment stream issued by Prudential Insurance Company of America.