What Is a Termination Date? The term termination date refers to the day on which a financial contract ends. This date is the natural ending of any contract—such as a swap, rental lease, or loan agreement—indicating that final payment is made and no further exchanges will occur. Contracts normally indicate the length of the term
What Is Termination of Employment? The term termination of employment refers to the end of an employee’s work with a company. An employee may be terminated from a job of their own free will or following a decision made by the employer. Employers who execute a termination of employment may do so for a number
What Is a Termination Statement? A termination statement is a legal document signed by a lending institution. The purpose of the document is to confirm that a loan, previously extended by that lender, has since been repaid by the borrower. For example, mortgage lenders are required to provide termination statements once the balance of the
Example of Term Life Insurance Thirty-year-old George wants to protect his family in the unlikely event of his early death. He buys a 10-year, $500,000 term life insurance policy with a premium of $50 per month. If George dies within the 10-year term, the policy will pay George’s beneficiary $500,000. If he dies after he turns
What Is Term Out? Term out is a financial concept used to describe the transfer of debt internally, within a company’s balance sheet. This is done through the capitalization of short-term debt to long-term debt. Changing the classification of debt on the balance sheet allows companies to improve their working capital and take advantage of
What Is a Term Payment Plan? A term payment plan is one of six options in payment plans for receiving the proceeds from a reverse mortgage—also known, if federally insured, as a home equity conversion mortgage (HECM). It provides a homeowner with equal monthly payments for a set period of time. A term payment plan
What Is a Term Repurchase Agreement? Under a term repurchase agreement (term repo), a bank will agree to buy securities from a dealer and then resell them back to the dealer a short time later at a pre-specified price. The difference between the re-purchase and sale prices represents the implicit interest paid for the agreement.
What Is a Term Sheet? A term sheet is a nonbinding agreement that shows the basic terms and conditions of an investment. The term sheet serves as a template and basis for more detailed, legally binding documents. Once the parties involved reach an agreement on the details laid out in the term sheet, a binding
What Are Terms of Trade (TOT)? Terms of trade (TOT) represent the ratio between a country’s export prices and its import prices. TOT indexes are defined as the value of a country’s total exports minus total imports. The ratio is calculated by dividing the price of the exports by the price of the imports and multiplying the result by
What Is Term to Maturity? A bond’s term to maturity is the length of time during which the owner will receive interest payments on the investment. When the bond reaches maturity the principal is repaid. Key Takeaways A bond’s term to maturity is the period during which its owner will receive interest payments on the
