The meaning of life, health, retirement and all the rest

April 07, 2010

My friend Dawn Thompson, who works on our corporate marketing team, oversaw the development of a plain language guide for employees recently. It’s an impressive document, and I think it has a lot to offer Today’s economy readers too.

I’ve pulled together a list of key terms you can bookmark for future use. This will help you wade through your financial services company’s materials. And if you ever come away from a meeting with your financial advisor wondering what he or she was talking about, send a link.

A

• Accidental death benefit: money paid to the beneficiary if the person insured dies accidentally
• Accumulation annuity: an investment for a certain period of time at a guaranteed interest rate
• Additional insured: other people covered by the insurance policy
• Adjudicate: the insurance company makes a decision about a claim
• Adjuster: claim reviewer
• Adjustment: an increase or decrease to the amount to be paid out for a claim
• Advance premiums: premiums charged at the beginning of the policy
• Agent of record: agent on the policy
• Amortization period: period during which regular payments are made to pay off a debt/loan
• Annual renewal agreement: agreement in which the insurance company agrees to renew the policy a certain number of times at a specified rate
• Annuity: a policy that pays out money regularly for the rest of the life of the person covered or for some other period of time
• Annuity, survivorship: annuity that goes to the spouse of the person covered if the person dies before the annuity period is over
• Appraiser: person who estimates the value of things
• Assigner: a person who transfers assets to another
• Assignment: transfer

B

• Beneficiary: person who receives the money from an insurance policy or investment account
• Beneficiary, contingent: back-up beneficiary; person who receives the money from the life insurance policy if the first beneficiary dies
• Beneficiary, irrevocable: a beneficiary who can’t be changed without his or her permission

C

• Capital gain: profit on the sale of an investment
• Cash (surrender) value: the amount of money the policy is worth as it grows to its full value; the insurance company pays this money back to the policyholder if he or she asks to end the policy (the insured person can also borrow money from this amount instead of ending the policy)
• Cessation: quitting, stopping
• Claim: an insured person asking the insurance company to pay him or her back for medical costs or other costs covered by the policy; or a beneficiary asking the insurance company to pay a death benefit under a life insurance policy
• Coinsurance: insurance where the insured person pays part of a bill and the insurance company pays the rest
• Collateral insurance: insurance to repay the insured person’s business loans upon his or her death
• Common shares: shares of ownership in a company that allow a person to vote at the company’s annual general meeting
• Company risk: the risk that the individual companies invested in won’t perform as well as expected
• Compulsory insurance: insurance required by law
• Contingent owner: person who will own the life insurance policy if the current owner dies before the policy ends
• Conversion right: right to change a policy (to a different kind of policy)
• Co-payment: the amount of money the insured person pays for certain services or products; the insurance company covers the rest
• Coupon rate: bond’s interest rate
• Credit or default risk: the chance that a company invested in will go bankrupt or have its credit rating downgraded, making it more expensive for the company to borrow money
• Currency or exchange risk: changes in the value of the Canadian dollar affecting one’s investments
• Cut-off clause: time limit for making a claim

D

• Death benefit: money paid to the beneficiary when the person covered by the insurance dies
• Decreasing term insurance: temporary life insurance in which the amount to be paid when the insured person dies goes down every year
• Deductible: the amount of expenses related to a claim that an insured person must pay before the insurance company will pay the rest of the claim
• Deferred premium payment plan: plan that lets an insured person pay the premium over time
• Depreciation: loss of value
• Designate: choose, set, label
• Disburse: pay, pay out
• Discount brokerage: a company that makes trades on behalf of investors, charging a lower commission, but not offering all the services a regular brokerage has (for example, advice)
• Dismemberment: loss of a body part
• Double insurance: two policies covering the same risk

E

• Effective date: start date
• Eligible: allowed, qualified
• Endorsement: addition (to a policy)
• Endowment policy: life insurance policy that will be paid out to the insured person if he or she is still alive when it ends
• Estate: assets and liabilities (of a person who died)
• Estate plan: plan to transfer the insured person’s assets and liabilities when he or she dies
• Excess limits premium: premium to cover a risk that is more costly than what the policy normally covers
• Exclusion: something that is not covered
• Executor: estate manager, person (named in a will) to manage the estate of a person who has died
• Executor de bonis non: replacement estate manager
• Expiration notice: warning of policy end
• Extended term insurance: a type of life insurance that will stay active even if the insured person does not pay the premiums, but only if there is enough money accumulated under the policy so far to pay for the premiums and other fees
• Face amount or face value: coverage amount, amount of insurance
• Face of policy: cover page

G

• Grace period: length of time that the policy will stay valid if the premium has been charged but not paid; or be specific about how long the insured person has grant give
• Group insurance: insurance through a group, often a workplace
• Guaranteed insurability: the ability to increase one’s coverage regardless of one’s health
• Guaranteed investment certificate: an investment for a certain period at a guaranteed interest rate

I

• Incontestability clause: a clause in a policy that says after two years, the insurance company cannot say the policy is invalid unless there was fraud at the time of sale
• Inflation risk: the chance that an investment won’t grow enough to cover the increase in prices over time (meaning today’s money won’t be worth as much in the future as it is worth now)
• Insurable interest: something worth insuring
• Insured: you, person covered by the insurance, insured person
• Interest rate risk: the risk that changes in the interest rate will affect your investment
• Intermediary: agent, negotiator, representative
• Intestate: without a will, not having a will

L

• Lapsed: ended, ended and not continued, cancelled
• Living benefit: money paid in advance (out of the death benefit amount) if the person covered by the insurance is deathly ill
• Longevity risk: the chance that a person will live longer than his or her income can support him or her

M

• Management expense ratio: the portion of a mutual fund’s expenses, including the fund manager’s pay, that are charged by a fund company before any returns are paid to investors
• Market risk: changes in market prices affecting an investment
• Maturity date: the date the bond issuer must repay the value of the bond
• Minimum retained premium: minimum premium kept on cancellation of a policy
• Mortality: death
• Mortgage life insurance: life insurance that, when a person dies, pays the company that holds his or her mortgage

N

• Named insured: person mentioned in the policy and 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: not giving important information
• Non-insurable risk: a risk the insurance company does not insure

O

• Occupational accident: work accident
• Occupational disease: disease from work
• Optional settlement clause: a clause that allows a person to choose how he or she wants the claim paid out

P

• Participating insurance: life insurance that pays out a dividend (money) to its policyholders if the company has surplus earnings related to life insurance; often referred to as “par insurance”
• Payee: the person paid
• Payer: the person paying
• ercentage participation: clause in a health insurance policy that says the percentage of a claim that the insurance company will pay out
• Permanent life insurance: provides lifetime coverage even though the insured person pays premiums for only a pre-determined period of time. As long as the premiums are paid, the life insurance stays in effect, no matter what the insured person’s age or health is
• Permanent partial disability: partly disabled for life
• Permanent total disability: totally disabled for life
• Physical hazard: physical danger
• Policy anniversary: the same month and day, every year, that a policy started
• Policy fund: where payments earn interest based on the investment account options chosen
• Policy limit: the maximum amount of money that the insurance company will pay out in claims under a policy
• Policy provisions: policy details
• Power of attorney: power to act for someone else
• Pre-existing condition: physical condition that existed before the beginning of the policy
• Preferred rates: a person gets lower premiums if he or she is less risky to insure (healthy, non-smoker)
• Preferred shares: shares of ownership in a company that do not give voting rights but do pay dividends (money)
• Premium: the monthly or annual payments in exchange for a life insurance policy
• Premium discount plan: getting a discount for paying premiums ahead of time
• Presumptive disability: considering the loss of an eye or limb or the ability to talk to be total disability
• Principal (or face value): the amount “borrowed” by someone issuing a bond
• Principal sum: the amount to be paid, in one payment, on the insured person’s death or accidental dismemberment
• Probationary period: the time from the first day of illness or disability until a health insurance policy starts paying
• Prohibited list/risk: list of risks the insurance company doesn’t insure
• Pro rata cancellation: cancelling a policy and getting back the premiums paid for coverage of time that has not passed yet
• Pro rata clause: clause that gives the costs for changing or cancelling a policy
• Prorating: adjusting benefits paid because of a mistake or because other insurance covers the same thing
• Protection: coverage
• Provisional premium: temporary premium or one-time premium
• Proxy: someone acting for someone else

R

• Rate of return: the gain or loss you make as a percentage of the total amount invested
• Reformation of a policy: rewording of a policy
• Remoteness of damage: how indirect the cause of the damage is
• Renewal premium: new premium
• Restoration premium: premium to bring a policy back to its original worth (after a claim)
• Retroactive restoration: clause in a policy that automatically brings it back to its original value after a claim
• Return premium: refund
• Rider: addition to a policy

S

•  Short rate cancellation: cancelling a policy before its end
• Stock company: a company that issues shares
• Straight life insurance: life insurance without any savings tied to it
• Surrender: to cancel a policy before its end, with both the person insured and the insurance company agreeing
• Surrender charge: fee the policyholder must pay if he or she cashes out the policy

T

• Tax-deferred: taxed later (for example, upon withdrawal)
• Term insurance benefit: gives the policyholder the ability to add term insurance to a permanent or universal life policy to protect someone for a temporary need
• Testate: having a will
• Testator: person making a will
• Trust: an account holding assets for a beneficiary
• Trustee: person managing a trust

U

• Underwrite: insure
• Underwriter: the insurance company
• Universal life insurance: combines permanent life insurance plus the ability to make investments that grow without tax within the policy

V

• Valuation: estimate of value

W

• Waiver: to abandon a right
• Waiver of premium: the policyholder does not have to pay the premiums
• Warranty: a statement in a contract that, if broken, usually entitles the other party to compensation

Topic: financial planning / health and wellness / retirement planning
Technorati tag: Canada / economics / economy / finance / financial planning / insurance / investing / markets / money / personal finance / retirement planning / stock market

this is an interesting list of retirement terminology as far as the financial planning goes ... I wonder about use this article to juxtapose our alternative look at retirement ? what would be put on a list or terms/definitions to promote the idea of wellness and meaning in in retirement ?

we could shoot a short video discussion with reference to the article, our take and a link to the meaningful retirement guide