Commutation

{
  "id": "MLC-T-INS-000856",
  "term": "Commutation",
  "field": "Insurance and risk management",
  "definition": "The process of converting a series of future payments, such as those from an annuity or a workers' compensation claim, into a single lump-sum payment. This often occurs when the parties agree to settle all remaining obligations at once. Commutation can provide immediate funds to the recipient but requires careful actuarial calculation to determine the present value of future payments.",
  "url": "https://mlchart.com/terminology/insurance/commutation/"
}