What is Lump sum payment?
Lump sum payment refers to a one-time large payment of money given to an employee, usually instead of a series of payments made over time.
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Lump sum payment definition
Lump sum payment refers to a one-time large payment of money given to an employee, usually instead of a series of payments made over time.
Lump sum payment has a lower value when provided to pay for an asset or service because the sum total of the funds is being paid upfront.
Benefits and risks of lump-sum payment
The main benefit of a lump-sum payment is that an individual gets a large sum of money upfront and can use it to invest in something of his/her choice. The biggest risk is the possibility of losing the money if invested wrongly.