What Is the Life Expectancy Method? The life expectancy method is a way of calculating individual retirement account (IRA) distribution payments by dividing the balance or total value of a retirement account by the policyholder’s anticipated length of life. The life expectancy method is the most straightforward method of calculating required minimum distributions (RMDs) for retirement
What Is a Life Income Plan? A life income plan is a financial product for high-income professionals that ensures a lifetime guaranteed income for retired participants. Similar to a charitable remainder trust, life income plans are funded by a pool of investments. Understanding the Life Income Plan Participants in a life income plan transfer assets
Company AM Best Rating Coverage Capacity Maximum Issue Age Policies Offered Nationwide Best Overall Compare Quotes on BestMoney A+ Over $5 million 85 Term, whole, UL, IUL, VUL, final expense Protective Best for Term Compare Quotes on BestMoney A+ Over $5 million 85 Term, whole, UL, IUL, VUL MassMutual Best for Financial Stability Compare Quotes
What Is the Lifetime Learning Credit (LLC)? The Lifetime Learning Credit (LLC) is a provision of the U.S. federal income tax code that lets parents and students lower their tax liability by up to $2,000 to help offset higher education expenses. Unfortunately, the LLC is not refundable, which means you can use the LLC to
What Is a Level Load? A level load is an annual charge deducted from an investor’s mutual fund assets to pay for distribution and marketing costs for as long as the investor holds the fund. For the most part, this fee goes to intermediaries who sell a fund’s shares to the retail public. The level
What Is a Level Payment Mortgage? A level payment mortgage is a type of mortgage that requires the same dollar payment each month or payment period. Level payment mortgages allow borrowers to know exactly how much they will have to pay on their mortgages each pay period. This stability makes it easier for them to
What Is Level-Premium Insurance? Level-premium insurance is a type of permanent or term life insurance where the premium remains the same over the policy’s life. With this type of coverage, premiums are thus guaranteed to remain the same throughout the contract. For a permanent insurance policy like whole life, the amount of coverage provided increases
What Is Financial Leverage? Financial leverage results from using borrowed capital as a funding source when investing to expand the firm’s asset base and generate returns on risk capital. Leverage is an investment strategy of using borrowed money—specifically, the use of various financial instruments or borrowed capital—to increase the potential return of an investment. Leverage
What Is a Leveraged Buyback? A leveraged buyback is a corporate finance transaction that enables a company to repurchase some of its shares using debt—reducing the number of shares outstanding increases the remaining owners’ respective shares. Also known as a leveraged share repurchase, a leveraged buyback has similar impacts as leveraged recapitalizations and dividend recapitalizations
What Is a Leveraged Buyout? A leveraged buyout (LBO) is the acquisition of another company using a significant amount of borrowed money (bonds or loans) to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loans, along with the assets of the acquiring company. Key
