An out of court lawsuit agreement that contains an offer of a Structured Settlement may indeed have advantages to both parties of the lawsuit. First of all a structured settlement agreement is basically an annuity that provides funds to the plaintive at specified time periods and for a specific amount. These periodic payments from the structured settlement are generally considered as nontaxable income to the recipient. However income derived from an investment made with funds from the structured settlement payments are typically taxable.
The advantage to the defendant comes from the fact that the annuity doesn’t require the upfront cash to the plaintive that a lump sum would require. But since the monies invested into the annuity by the defendant will actually generate interest payments that are typically re invested into the annuity, the actual cost to the defendant are normally much lower than that of a lump sum payment.