An interim payment is a sum of money paid to a person or company in anticipation of a decision on a final payment total. The idea is to partially satisfy a financial obligation. Interim payments help a creditor fill a gap during which it would not receive compensation. An interim payment should be followed by another payment that completes a compensation agreement.
Interim payments are common when federal employees retire, according to FedSmith.com, an information site for federal workers. It can take several months to finalize the details of a pension payout, so interim payments fill the income void until an agreement is reached. Insurance companies also make interim payments on policy claims as they complete due diligence and processing.