A lump sum payout is a single payment arrangement structured to satisfy the payment of money owed to a recipient. Most of the time lump sum payments are arranged to pay lottery winnings and court-ordered settlements to offset an outstanding futures financial obligation.
It is very common for insurance companies to offer lump sum payments to the beneficiaries of life insurance policies. When it comes to lottery winnings or retirement benefits, people might have a choice to receive fixed payments (annuities) for a lifetime or for a specified number of years.