Find out the meaning of terms used in insurance and financial planning.





  • Accidental death benefit

Money paid to the heirs if the insured person dies by accident.

  • Accumulation annuity

Investment for a certain period of time at a guaranteed interest rate.

  • Additional insured

Other people covered in the insurance policy.

  • Adjudicate

The insurance company makes a decision about the claim to be paid.

  • Adjuster

An individual employed by an insurer to evaluate losses and settle policyholder claims.

  • Adjustment

Increase or decrease for the amount to be paid for the claim.

  • Advance premiums

Premium that occur when a policy has been processed, and the premium has been paid prior to the effective date. These are a liability to the company and not included in written premium or the unearned premium reserve.

  • Agent of record

Agent of the policy notes.

  • Amortization period

The period in which the regular payments are made to pay the debt/loan.

  • Annuity

A contract in which the buyer deposits money with specific payments to be made at regular intervals for a fixed period or for life.

  • Annuity, survivorship

An annuity that received by the spouse from a closed policyholder if the person died before the annuity period is over.

  • Appraiser

An individual who estimates value.

  • Assigner

An individual who transferred the asset.

  • Assignment

The transfer of all or part of a policy owner’s legal title and rights to a policy to another person. It is possible to change this type of transfer at a later date.

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  • Beneficiary

An individual who become eligible to receive payment due to will, life insurance policy, retirement plan, annuity, trust, or other contract.

  • Beneficiary, contingent

An individual who become eligible to receive payment from the life insurance policy if the first recipient dies.

  • Beneficiary, irrevocable

Beneficiaries that cannot be changed without their permission.

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  • Capital gain

Gain on sale of investment.

  • Cash (surrender) value

The amount of money the life insurance policy owner will receive as a refund if the policy owner cancels the coverage and returns the policy to the company.

  • Cessation

Terminate cooperation.

  • Claim

An insured person asks the insurance company to pay him back for medical expenses or other expenses covered by the policy; or the recipient asks the insurance company to pay the death benefit in the life insurance policy.

  • Coinsurance

Insurance in which the insured party pays part of the bill and the insurance company pays the rest.

  • Collateral insurance

Insurance to pay back the insured person's business loan for his death.

  • Common shares

Ownership of shares in a company that allows one to vote at the company's annual general meeting.

  • Company risk

The risk that invented individual companies will not do as well as expected.

  • Compulsory insurance

Insurance required by law.

  • Contingent owner

The person who will have a life insurance policy if the owner dies before the policy ends.

  • Conversion right

Right to change a policy (to a different kind of policy).

  • Copayment

The amount of a certain fee to be paid by the participant, the amount stipulated in the policy with an agreement that only above that amount will be reimbursed.

  • Coupon rate

Interest rate bonds.

  • Credit or default risk

A chance that the invested company will go bankrupt or have a credit rating lowered, making it more expensive for the company to borrow money.

  • Currency or exchange risk

Changes in currency values that affect a person's investment.

  • Cut-off clause

Deadline for filing a claim.

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  • Death benefit

The money paid to the heirs when the insured person dies.

  • Decreasing term insurance

Temporary life insurance where the amount to be paid when the insured party dies down every year.

  • Deductible

Can be deducted.

  • Deferred premium payment plan

A plan that allows an insured person to pay premiums from time to time.

  • Depreciation

Value loss.

  • Designate

Selecting, setting.

  • Disburse


  • Discount brokerage

A company that makes trades on behalf of an investor, charging a lower commission, but does not offer all of the broker's usual services (eg, advice and criticism).

  • Dismemberment

Loss of body parts.

  • Double insurance

Two policies that cover the same risk.

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  • Effective date

Start date.

  • Eligible


  • Endorsement

Additional (for policy).

  • Endowment policy

Life insurance policy will be paid to the insured if he is alive when his membership ends.

  • Estate

Assets and liabilities (of the deceased).

  • Estate plan

Plan to transfer the insured's assets and liabilities when he dies.

  • Excess limits premium

Premiums to cover risks that are more expensive than the policies covered.

  • Exclusion

Something not covered / covered in a premium.

  • Executor

The person (mentioned in the will) to administer the property of a deceased person.

  • Executor de bonis non

Substitute the person mentioned in the will to manage the property of the deceased.

  • Expiration notice

Final policy warning.

  • Extended

The type of life insurance that will remain active even if the insured does not pay the premium.

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  • Face amount or face value

Coverage amount, amount of insurance.

  • Face of policy

Cover page.

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  • Grace period

The length of time that the policy will remain in effect if the premium has been charged but has not been paid, or more specifically about how long the insured has granted.

  • Group insurance

Group insurance, usually in the form of one company.

  • Guaranteed insurability

The ability to increase a person's coverage regardless of his or her health condition.

  • Guaranteed investment certificate

Investment for a certain period of time at a guaranteed interest rate.

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  • Incontestability clause

The clause in the policy that says after two years, the insurance company can not claim that the policy is invalid unless there is fraud at the time of sale.

  • Inflation risk

The likelihood that the investment will not grow enough to cover the price increase over time (meaning today's money will not be worth as much in the future as it is worth now).

  • Insurable interest

Something worth being insured.

  • Insured

You as a person who is covered and protected in premiums.

  • Interest rate risk

The risk that changes in interest rates will affect your investment.

  • Intermediary

Agent, negotiator, representative.

  • Intestate

No wills.

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  • Lapsed

Ended and not resumed/ canceled.

  • Living benefit

Money paid in advance (of benefit amount) if the insured person is seriously ill.

  • Longevity risk

The possibility that someone will live longer.

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  • Management expense ratio

Part of the expense of the mutual fund, including the salary of the mutual fund manager charged by the fund company before it is paid back to investors.

  • Market risk

Changes in market prices that affect investment.

  • Maturity date

Date issued to pay bond value.

  • Minimum retained premium

Minimum premium for policy cancellation.

  • Mortality


  • Mortgage life insurance

Insurance that at the time someone dies, pay the company that pays the mortgage.

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  • Named insured

The person mentioned in the policy, and is covered by the policy.

  • Net asset value per share

The value of one unit in a mutual fund.

  • Non-concurrent insurance

Insurance covering different risks.

  • Non-disclosure

It does not provide important information.

  • Non-insurable risk

Risks that are not guaranteed by the insurance company.

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  • Occupational accident

Work accident.

  • Occupational disease

Disease because of work.

  • Optional settlement clause

A clause that allows a person to choose how he wants his claim to be paid.

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  • Participating insurance

Life insurance that pays outgoing dividends (money) to the policyholder if the company has surplus profits associated with life insurance, often referred to as "par insurance".

  • Payee

People get paid.

  • Payer

People who pay.

  • Percentage participation

The clause in the health insurance policy that says the percentage of claims that the insurance company will pay.

  • Permanent life insurance

Provides lifetime coverage even if the insured pays the premium for the specified time. As long as the premiums are paid, life insurance remains in force, no matter what the age of the insured or how health conditions are.

  • Permanent partial disability

A partial disability for life.

  • Permanent total disability

Disability for life.

  • Physical hazard

Physical harm.

  • Policy anniversary

The same day and month each year to mark the starting policy.

  • Policy fund

The circumstance in which the payment earns interest based on the choice of selected investment account.

  • Policy limit

The maximum amount of money that the insurer will pay claims under the policy.

  • Policy provisions

Policy details.

  • Power of attorney

Giving power from someone to a lawyer.

  • Pre-existing condition

The physical conditions that existed before the start of the policy.

  • Preferred rates

A person gets a lower premium if he is less risky to be guaranteed (healthy, non-smoker).

  • Preferred shares

Shares of ownership in companies that do not vote but do pay dividends (money).

  • Premium

Monthly or annual payment for life insurance policy.

  • Premium discount plan

Get a discount for paying a premium before maturity.

  • Presumptive disability

Consider the loss of eyes or limbs or the ability to speak into total disability.

  • Principal (or face value)

The amount that is "borrowed" by someone who issues the bond.

  • Principal sum

Amount to be paid, in a single payment, on the death of the insured or intentional withholding.

  • Probationary period

The time from the first day of illness or disability until the health insurance policy begins to pay.

  • Prohibited list/risk

List of corporate risks that are not covered by insurance.

  • Pro rata cancellation

Cancel policy and regain premium paid for unexcepted timeframe.

  • Pro rata clause

The clause that provides the cost to change or cancel the policy.

  • Prorating

Adjusting benefits given by mistake or other insurance covers the same.

  • Protection

Protection for people who follow insurance.

  • Provisional premium

Temporary premium.

  • Proxy

Someone who acts for someone else.

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  • Rate of return

The profit or loss you make as a percentage of the total amount invested.

  • Reformation of a policy

Rewording of the policy.

  • Remoteness of damage

The cause of the damage indirectly.

  • Renewal premium

Updating premium.

  • Restoration premium

The premium to bring the policy back to its original value (after the claim).

  • Retroactive restoration

The clause in the policy that automatically brings back to its original value after the claim.

  • Return premium

Premium return process.

  • Rider

Added policy.

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  • Short rate cancellation

Cancel policy before it expires.

  • Stock company

Companies that issue shares.

  • Straight life insurance

Life insurance that is not binding on any savings.

  • Surrender

To cancel the policy before it expires, with the consent of both parties (the insured party, and the insurance company).

  • Surrender charge

The fee payable by the policyholder if he decides to monetize his policy.

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  • Tax-deferred

Subject to tax later (for example, after withdrawal).

  • Term insurance benefit

Giving policyholders the ability to add insurance to a permanent or universal living policy to protect a person in temporary need.

  • Testate

Right to own.

  • Testator

The person making the testament.

  • Trust

An account where the asset is for the person who will receive the benefits.

  • Trustee

The person managing the account.

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  • Underwrite

The insured party.

  • Underwriter

Insurance company.

  • Universal life insurance

Incorporating permanent life insurance plus the ability to make investments that grow without tax in policy.

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  • Valuation

Estimated value.

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  • Waiver

Leave the rights.

  • Waiver of premium

The policyholder does not have to pay the premium.

  • Warranty

The statement in the contract, which if not covered in the middle of the contract will usually be given to the other party for compensation.

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