A financial or insurance arrangement in which the individual who claims to resolve a wrongful act leading to legal liability by receiving periodic payments on an agreed schedule rather than receiving the whole money at once is known as structured settlement . This method was first utilized in Canada and later on became a part of common law in USA, Australia and Canada. This arrangement was first used for children affected by Thalidomide. It became very popular in 1970 in the USA as an alternative to lump sum settlements. Other than that a structured settlement also provides with income tax as well as spendthrift requirements benefits. Structured settlement provides ongoing income and also reduces the risk of blowing the huge sum of money by making poor choices. It is also considered the best way to improve financial security if used pay-outs wisely.