What is the meaning of an interim payment?
The term "interim payment" has numerous applications across different industries. The bottom line, however, is that it is a payment made between other payments. The specifics are unique to each industry. There is even a related legal term of "interim order" which has a similar meaning.
"Interim" comes from the Latin "inter," meaning between, and dates from about 1580. It is a noun, but functions as an adverb in "interim payment."
The Financial Dictionary defines an interim payment as one that is made while waiting for the size of the other payments to be decided or simply for the other payments to be made. For example, "He made an interim payment of £3,250 on the loan, until the final loan amount was decided."
Defined strictly as applicable to the insurance industry, the amount paid in partial settlement of a claim is an interim payment. This doesn't mean the claim is settled. Other parts of your claim will still be dealt with. For example, "I received an interim payment from the insurance company to purchase a new car because my vehicle was totalled."
Related Definition: Legal
In the legal world, there is a closely related term with a similar meaning--"interim order." An interim order is a temporary court order that is for a limited duration until a complete order is handed down after a full hearing. For example, "She received an interim order to receive child support, until the date of the full hearing."
It is common in the event of tragic accidents for the responsible party to issue an interim payment to victim's families. For example, in May of 2010 Air India issued interim payments for the families of the 122 victims who died in the Mangalore plane crash.