What Is a Life Settlement? A life settlement refers to the sale of an existing insurance policy to a third party for a one-time cash payment. Payment is more than the surrender value but less than the actual death benefit. After the sale, the purchaser becomes the policy’s beneficiary and assumes payment of its premiums.
What Is a Life Annuity? The term life annuity refers to a financial product that features a predetermined periodic payout amount until the death of the annuity owner—called the annuitant. An annuitant typically pays into the annuity periodically when they are still working. Annuitants may also buy the annuity product in one large, lump-sum purchase—usually
What Is a Life Cycle? The term life cycle refers to the course of events that leads from the beginning to the end of a product, business, or industry. This means that a life cycle brings new products, companies, and industries into existence, sees them grow, and eventually leads to their critical mass and decline.
What Is a Life Estate? A life estate is property, usually a residence, that an individual owns and may use for the duration of their lifetime. This person, called the life tenant, shares ownership of the property with another person. This person is called the remainderman, and automatically receives the title to the property upon
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
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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
