Settlements 101.com -- Info Guide to Injury, Accident & Insurance Settlements

Structured Settlements Glossary

Period Certain - Settlement annuity structured to make payments for a guaranteed period of time.

Revenue Ruling 79-220 — IRS code regarding the tax-free status of payments received from personal injury settlements.

Section 104a(1) — IRS code that allows payments received for workers compensation to be excluded from the gross income of a person’s taxes.

Section 104a(2) — IRS code that allows payments received from personal injury settlements to be excluded from gross income amount on a person’s taxes.

Settlement - Out of court agreement on the terms for resolving a dispute between the parties in a lawsuit.

Structured settlement - Payment for a personal injury claim where the settlement is paid over time on an agreed-to schedule rather than in a single lump sum.

Subrogation - A clause where an insurance company has the right to repayment if the claimant in a structured settlement later receives payment for the same care or services that the insurance company is paying for.