Ad Infinitum

What Does Ad Infinitum Mean?

“Ad infinitum” is a Latin phrase meaning “without end or limit.” In finance, it refers to a cash flow that occurs at regular intervals indefinitely, without a specific time limit.

Insuranceopedia Explains Ad Infinitum

“Ad infinitum” can refer to a company’s predicted steady cash flow, based on an analysis of its performance over a specific number of years. It may also describe a government bond in England that pays the same interest rate indefinitely.

For businesses, ad infinitum cash flow remains a projection rather than a certainty, as it does not account for unforeseeable disruptions, such as force majeure events, that could lead to dissolution.

While the numerical value of ad infinitum payments remains constant, their financial value diminishes over time due to the effects of inflation and the lack of adjustment for the future declining value of money.