Lump Sum

Lump sum

A large one-time payment of money.

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Lump Sum

A large amount of money one spends at once, especially to make a large purchase. For example, if a house costs $175,000, and the buyer pays the total amount up front, the buyer is said to make a lump sum payment.

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Lump sum. A lump sum is an amount of money you pay or receive all at once rather than in increments over a period of time.

For example, you buy an immediate annuity with a single lump-sum payment. If you receive the face value of a life insurance policy when the insured person dies, or receive the full value of your retirement account, those payments are also lump sums.