There isn't enough information to answer this question. What is also needed is the interest rate (e.g. a money market rate that the person in question could collect if the lump sum were put into a bank account) for the x years that the person is is expected to live. Let's assume that the interest rate is i (in fractions of 1, so 5% means i=0.05), fixed , and that the person will die in year x after the agreement goes into force, also fixed. Also assume that the structured settlement payments are made at the beginning of each year. The structured settlement is favorable if
Of course the assumptions of constant interest rate and fixed life expectancy are unrealistic. Actuarial models exist that allow a company selling term insurance to compare the two (this is after all almost the same thing!), but an individual has a different viewpoint, since he is not interested in coming out ahead on average for a large number of life insurance policies, but rather in coming out ahead with large probability.