FAQs About Lump Sum Payments
What is a lump sum payment?
A payment awarded, often as a result of a personal injury lawsuit, all at once is a lump sum payment. As opposed to an annuity, which pays out over time, a lump sum payment does not have long-term reliability. However, a lump sum is more practical for situations of financial need. In such cases, you can sell future annuity payments in exchange for a lump sum usable in the short-term.
Lump sum or annuity, how do they compare?
If you have a scheduled annuity that no longer suits your current circumstances, selling part or all of your future payments for a lump sum can give you the funds you need. A lump sum can be invested again or put toward emergencies. Cashing in your annuity for a lump sum now can keep you out of debt and help you save money for the future.