What Is Company-Owned Life Insurance (COLI)? Company-owned life insurance (COLI) is a life insurance policy that pays a benefit to the company if an insured employee dies. Key Takeaways Company-owned life insurance (COLI) is a life insurance policy that pays a benefit to the company if an insured employee dies.Company-owned life insurance policies can help
What Is Collaborative Consumption? Collaborative consumption is the shared use of a good or service by a group. Whereas with normal consumption an individual pays the full cost of a good and maintains exclusive access to it, with collaborative consumption multiple people have access to a good and bear its cost. A common example is
What Is a Collar? A collar, also known as a hedge wrapper or risk-reversal, is an options strategy implemented to protect against large losses, but it also limits large gains. An investor who is already long the underlying creates a collar by buying an out-of-the-money put option while simultaneously writing an out-of-the-money call option. The put
What Is Collateral? Collateral in the financial world is a valuable asset that a borrower pledges as security for a loan. When a homebuyer obtains a mortgage, the home serves as the collateral for the loan. For a car loan, the vehicle is the collateral. A business that obtains financing from a bank may pledge
What Is Collateralization? Collateralization is the use of a valuable asset as collateral to secure a loan. If the borrower defaults on the loan, the lender may seize and sell the asset to offset their loss. For lenders, the collateralization of assets provides a level of reassurance against default risk. For borrowers with poor credit
The Collateral Source Rule: An Overview The collateral source rule is a law in state jurisdictions that prevents the reduction of damages awarded to a plaintiff for injury, illness, or disability by the amount already recovered from a third party such as an insurer. The rule varies by state but generally mandates that damages awarded
What Is a Collectible? A collectible refers to an item worth far more than it was initially sold for because of its rarity and/or popularity. The price for a particular collectible usually depends on how many of the same items are available and its overall condition. Common categories of collectibles include antiques, toys, coins, comic
What Is a Collection Agency? A collection agency is a company used by lenders or creditors to recover funds that are past due, or from accounts that are in default. Often, a creditor will hire a collection agency after it has made multiple failed attempts to collect its receivables. A lender may outsource the debt-collection
What Is Collection-Proof? “Collection-proof” is a term to describe a person who has no income or assets that can legally be seized for debt repayment. In essence, the debtor doesn’t have any assets that a creditor can collect after a court requires the debtor to pay. A creditor who obtains a judgment can attempt to garnish a
What Is Collective Bargaining? The term “collective bargaining” refers to the negotiation of employment terms between an employer and a group of workers. Employees are normally represented by a labor union during collective bargaining. The terms negotiated during collective bargaining can include working conditions, salaries and compensation, working hours, and benefits. The goal is to
