lump sum
LUMP SUM
/lʌmp sʌm/
A single payment made at a particular time, as opposed to a number of smaller payments or installments.
Retirees often have to choose between a 'lump sum' (all the money now) or an 'annuity' (smaller payments forever).
The story behind the word. 'Lump' refers to a compact mass of something, and 'sum' comes from the Latin 'summa' (the highest point/total). Together, they describe a 'mass total' of money.
Word relationships
- one-off payment: Common in the UK; implies a payment that won't happen again.
- installments: A series of regular payments.
- annuity: A yearly recurring payment.
Commonly confused with
- stipend: A stipend is a regular, small payment; a lump sum is a large, one-time amount.
Collocations
- lump sum payment
- lump sum distribution
- receive a lump sum
Example sentences
- "The policyholder chose to receive the death benefit as a lump sum rather than in monthly installments." Insurance Claim
- "The lottery winner opted for the lump sum payout, despite the higher tax burden." News
Memory hook
A 'lump' is one big piece; a 'lump sum' is one big piece of money. All at once.
When not to use
Don't use this for a series of payments; it must be the whole amount at once.
Fun facts
- In the 19th century, 'lump' was often used to describe something that was taken as a whole without being weighed or measured.
Related words
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