What Is Liquefaction? Liquefaction is a phenomenon in which the soil underneath a building can become unstable due to violent ground movements such as earthquakes or construction blasts. The term is widely used in the insurance industry, since liquefaction can cause major damage to buildings and utilities infrastructure, resulting in insurance claims. Key Takeaways Liquefaction
What Are Liquid Alternatives? Liquid alternative investments (or liquid alts) are mutual funds or exchange-traded funds (ETFs) that aim to provide investors with diversification and downside protection through exposure to alternative investment strategies. These products’ selling point is that they are liquid, meaning that they can be bought and sold daily, unlike traditional alternatives which offer monthly
What Is a Liquid Asset? A liquid asset is an asset that can easily be converted into cash in a short amount of time. Liquid assets include things like cash, money market instruments, and marketable securities. Both individuals and businesses can be concerned with tracking liquid assets as a portion of their net worth. For the purposes
What Are Liquidated Damages? Liquidated damages are presented in certain legal contracts as an estimate of otherwise intangible or hard-to-define losses to one of the parties. It is a provision that allows for the payment of a specified sum should one of the parties be in breach of contract. Key Takeaways Liquidated damages are presented
What is a Liquidating Dividend A liquidating dividend is a type of payment that a corporation makes to its shareholders during a partial or full liquidation. For the most part, this form of distribution is made from the company’s capital base. As a return of capital, this distribution is typically not taxable for shareholders. A
What Is the Lifelong Learning Plan? Lifelong Learning Plan refers to a provision applicable to the Canadian Registered Retirement Savings Plan (RRSP). The plan allows RRSP contributors a non-taxable temporary withdrawal of up to $20,000 from their accounts in order to finance their education or that of their spouse or common-law partner (CLP). The provision
What Is a Life Option? The life option is one example of a payout scheme for an annuity contract. It guarantees periodic payments to the annuitant for the remainder of their life. Since that timeline is, by definition, unknown, the life option involves some financial risk for both the annuitant and the insurance company making
What Is Lifestyle Creep? Lifestyle creep occurs when an individual’s standard of living improves as their discretionary income rises and former luxuries become new necessities. The rise in discretionary income can happen either through an increase in income or decrease in costs. A hallmark of lifestyle creep is a change in thinking and behavior that
What Is a Lifestyle Fund? The term lifestyle fund refers to an investment fund that manages a diversified portfolio across assets with varying risk levels. These funds determine the best assets for investors based on their risk tolerance, age, and investment goals. They are generally suited for long-term investing—especially for those who want a savings
What Is Lifestyle Inflation? Lifestyle inflation refers to an increase in spending when an individual’s income goes up. Lifestyle inflation tends to become greater every time an individual gets a raise and can make it difficult to get out of debt, save for retirement, or meet other big-picture financial goals. Lifestyle inflation is what causes people
