Profit sharing is a type of incentive plan in which companies share a portion of their profits with their employees. Unlike a fixed bonus or salary, the amount shared depends on the company’s profitability. It is typically paid out annually and can be distributed in cash or contributed to employee retirement accounts. Profit sharing motivates … Read more
A balloon payment is a financial term referring to the final payment of a loan that is significantly larger than the previous installments. It is usually found in loans that do not fully amortize over their term. For example, if you take out a five-year loan with low monthly payments based on a 30-year amortization … Read more
An Indemnity Plan is a traditional health insurance model that reimburses the insured for medical expenses up to a certain limit. Unlike managed care plans like HMOs or PPOs, indemnity plans give you the freedom to choose any doctor, specialist, or hospital without requiring referrals. Instead of paying your medical provider directly, the insurer reimburses … Read more
Wage garnishment is a legal procedure in which a portion of an individual’s earnings is withheld by their employer to repay a debt. It typically occurs when a court or government agency issues an order requiring the employer to deduct a specific amount from an employee’s pay check. The withheld money is sent directly to … Read more
Comprehensive coverage, also known as “other than collision” coverage, pays for the repair or replacement of your car if it’s damaged by events that don’t involve a crash. This includes: It typically comes with a deductible, which is the amount you pay out-of-pocket before your insurance kicks in. What Does Comprehensive Insurance Cover? Here’s a … Read more
Group insurance is a type of insurance policy that covers a defined group of people, usually employees of a company, members of a society, association, or professional group. This policy is usually purchased by an employer or organization, and coverage is extended to all eligible members. Key Features of Group Insurance Types of Group Insurance … Read more
Motor insurance is a contract between the vehicle owner and the insurance company that provides financial coverage for damages to the insured vehicle, third-party property, and bodily injuries. It is mandatory by law in many countries, including India and the U.S., to have at least third-party liability insurance for any vehicle on the road. Types … Read more
A binding agreement is a written or verbal contract that is legally enforceable. Once parties agree to the terms and conditions, they are legally obligated to fulfill their responsibilities under the agreement. If any party breaches the agreement, legal action can be taken to enforce it. Key Elements of a Binding Agreement: For an agreement … Read more
A prepayment penalty is a fee that a lender may charge if you pay off your loan early, either partially or in full, before the agreed term ends. This could happen if you: The purpose of this penalty is to compensate the lender for the interest income they lose when a loan is paid off … Read more
A secured credit card is a type of credit card backed by a refundable security deposit, which typically becomes your credit limit. For example, if you deposit $300, your credit limit will be $300. This deposit protects the card issuer in case you default, making it easier for people with low or no credit scores … Read more