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242 Cards in this Set
- Front
- Back
1033Waiver
|
A legal document granted by state insurance departments
that allows those who have been convicted of a felony involving dishonesty or breach of trust to legally sell insurance. |
|
12b-1 Fee
|
Annual fee charged to cover general expenses of no-load
mutual funds; considered an operational expense. |
|
24-Hour Coverage
|
A health insurance program offered in some states that
combines occupational (workers' compensation) and non-occupational coverage in a single package; generally purchased from either a health or a casualty insurance producer. |
|
401(k) Plan
|
A CODA plan that allows employees to place a set
percentage of their wages in a retirement account; 401(k) plan participants may utilize a number of advantages under this plan, such as tax-deductible contributions, the ability to freely borrow from the plan's earnings without penalties, and, in some cases, matching contributions from employers. |
|
403(b) Plan
|
A CODA plan designed for employees of non-profit
organizations (such as schools, churches, and hospitals) that functions much like a 401(k) plan. |
|
Abandonment Clause
|
A property insurance provision that protects the insured’s
ability to receive a full settlement amount in the event that covered property is beyond repair, or its repair costs are more than the property’s total value; when this clause is invoked by the insured, the insurer pays the full settlement amount and retains right of salvage (if applicable) after the insured abandons the property. Also referred to as an abandonment condition. |
|
Abandonment Condition
|
A property insurance provision that protects the insured’s
ability to receive a full settlement amount in the event that covered property is beyond repair, or its repair costs are more than the property’s total value; when this clause is invoked by the insured, the insurer pays the full settlement amount and retains right of salvage (if applicable) after the insured abandons the property. Also referred to as an abandonment clause. |
|
Absolute Assignment
|
A transaction in which a policyowner (assignor) transfers
all legal rights under an insurance policy to another (assignee); the assignor is typically left with no way to recover the surrendered rights; also known as complete assignment or permanent assignment. |
|
Absolute Liability
|
Liability assumed by a party involved in a dangerous
activity; for example, a company that uses explosives assumes absolute liability for any damages related to the use of those explosives. |
|
Accelerated Benefit Rider
|
A life insurance policy rider which, under certain
circumstances, allows a policyowner to to receive some or all of a policy’s death benefit while still living; also referred to as a living benefits option. |
|
Accelerated Benefits
|
Life insurance death benefit funds distributed on a tax-free
basis while the insured is still living, generally available only if the insured has limited life expectancy; distributions are not considered a policy loan, since they do not have to be repaid, and the value of the policy decreases with each accelerated benefit payment. |
|
Accident
|
Any unexpected event that results in a loss and is outside
the control of all parties involved. |
|
Accident-Only Insurance
|
Insurance that only offers coverage to individuals and
groups who are traveling on a bus, airplane, train, or rental vehicle; also known as "travel accident" insurance. |
|
Accidental Bodily Injury
|
A provision found in some disability income policies that
requires benefits be paid only if an injury is unanticipated or accidental; this provision is less restrictive than the accidental means provision, in that insureds can still receive benefits if they are injured or suffer illness while performing dangerous activities, as long as they did not voluntarily wish to be harmed or expect injury to occur. |
|
Accidental Death
|
The unexpected end of a person's life, with no other
contributing cause, within 90 days of a triggering event, such as a car accident. |
|
Accidental Death and Dismemberment Coverage (AD&D)
|
Insurance policy or rider added to life or health policy that
pays a lump sum to the insured or his beneficiaries if the insured dies in an accident or suffers dismemberment of limbs or eyesight in an accident; AD&D is typically included in group insurance plans. |
|
Accidental Death Rider
|
A life insurance policy endorsement that provides for the
payment of a multiple death benefit (usually double the policy's face value) in the event that an insured dies within 90 days of an accident deemed to be the sole cause of death; also known as a double indemnity rider. |
|
Accidental Means
|
A provision found in some types of disability income
policies that requires benefits be paid only in the event of "accidental means" (i.e. circumstances that could not have been reasonably foreseen by the insured); for example, injuries or illnesses related to actions taken by the insured (such as jaywalking) or activities engaged in by the insured (such as playing tackle football) would not be covered. |
|
Accidental Results
|
A provision found in some disability income policies which
stipulates that only the loss must be unintentional (and not the cause of loss) in order for the insured to receive benefits. |
|
Accounts Receivable Coverage Form
|
A business owner policy floater that covers monies
uncollectible from customers because of damage to an insured’s accounts receivable records. |
|
Accredited Investor
|
An individual or entity that meets one of the requirements
of Regulation D, Rule 501; high income investors. |
|
Accumulation Period
|
The first stage of an annuity's life cycle during which funds
are contributed, or paid into, the annuity; an annuity contract may be terminated during the accumulation period, but not after the policy is annuitized; also referred to as the accumulation phase. |
|
Accumulation Phase
|
The first stage of an annuity's life cycle during which funds
are contributed, or paid into, the annuity; an annuity contract may be terminated during the accumulation phase, but not after the policy is annuitized; also referred to as the accumulation period. |
|
Accumulation Units
|
Term used to describe funds deposited into a variable
annuity; the value of an accumulation unit is calculated in much the same way the value of shares in a mutual fund is determined, using the current dollar value of the separate account (the investment portfolio) and the total number of accumulation units that have been distributed to other annuitants invested in the same account. |
|
Activities of Daily Living (ADL)
|
Actions taken by a person such as eating, dressing, bathing,
toileting, and mobility; ADLs are defined and used by healthcare professionals to determine an individual's ability to function independently and how much assistance is required by an applicant for long-term care insurance. |
|
Actual Cash Value
|
The cost to replace property at its value at the time of loss;
actual cash value is calculated by subtracting depreciation from the item's replacement cost. |
|
Actuaries
|
Business professionals who deal with the financial impacts
of risks and uncertainties; their assessments of data and statistics help form the basis for premium rates of insurance policies. |
|
Addition
|
Single-premium insurance policies of same policy type.
|
|
Additional Coverage
|
Supplementary protection that is automatically provided (at
no additional cost) above and beyond the major coverage categories, in many cases increasing the value of a property insurance policy; additional coverages provide protection against perils such as debris removal and credit card/identify theft. |
|
Additional Insured
|
The secondary business or individual with a stake in an
insurance contract; additional insureds are only found in commercial insurance contracts. |
|
AdditionalMonthly Benefit (AMB)
|
A short-term rider providing additional benefits to a
disabled insured during the first 6 or 12 months of a claim. |
|
Adhesion
|
The notion that the insured agrees to and complies with the
terms of the insurance policy as written. |
|
Adjustable Life Policy
|
A life insurance policy that allows a policyowner to modify
certain features of the contract without purchasing a new policy, such as the policy's premium amount; premium payment mode; face amount; or maturity date. |
|
Adjustable Premium Life Insurance
|
A highly customizable life insurance policy with varying
terms, payment schedules, premium amounts, face values, and payout amounts; also known as "flexible life insurance." |
|
Adjusted Gross Income (AGI)
|
All income earned by an individual, minus any tax
deductions; this includes wages, capital gains, income from retirement accounts, and any other sources of income. |
|
Administrative Capability
|
The idea that the employer is responsible for ensuring that
the administration of a group insurance plan is conducted in a legal, objective and confidential manner. |
|
Administrator
|
The person responsible for overseeing the securities
industry in each state pursuant to the Uniform Securities Act. |
|
Admitted Insurer
|
An insurer that meets the state's legal requirements for
conducting insurance business; also referred to as an authorized insurer. |
|
Advantage Plan
|
Insurance plan offered under Medicare: Part C; the four
types of advantage plan are private fee-for-service, specialty, managed care (HMO), and preferred provider organization (PPO) plans. |
|
Adverse Selection
|
The tendency of people with a higher risk for loss to apply
for or continue insurance coverage to a greater extent than those with a lower risk for loss. |
|
Advertisement
|
Communication that is directed to the public at large; the
creator of the ad has no control over who will view it. |
|
Advertising Injury
|
Harm done to an individual or company's reputation
through deceptive or misleading advertising practices. |
|
Adviser’s Disclosure Brochure (FormADV)
|
The uniform two-part form used by investment advisers to
register with both the SEC and state securities authorities. |
|
Affiliation Period
|
A period of time that must pass before health care insurance
coverage provided by an HMO becomes effective. |
|
Affirmatory Warranty
|
A statement regarding a fact as it exists at the time the
contract is formed. |
|
After-Tax Dollars
|
Money that has already been subject to taxation.
|
|
After market
|
A market in which resales of securities occur.
|
|
Age of Majority
|
The age at which an individual is legally considered an
adult with all the rights and responsibilities of adulthood. |
|
Agency
|
A relationship in which one person (the agent) is granted
the authority to act on behalf of another person (the principal). |
|
Agency Cross Transactions
|
A prohibited transaction that occurs when an investment
adviser sells or purchases a security from its own account to a client without notifying the client in writing and obtaining the client's consent before completing the transaction. |
|
Agent
|
Insurance: An official representative of an insurance
provider who acts on the provider's behalf in selling and servicing insurance contracts. Securities: An official representative of a broker dealer who acts on the broker dealer's behalf in selling and servicing securities; also referred to as registered representative. |
|
Aggregate Claim Amount
|
A formula used by insurers to calculate premium rates; the
aggregate claim amount is calculated by multiplying the claim frequency rate by the average dollar amount per claim. |
|
Aggregate or Aggregate Limit
|
The total amount that an insurer will pay for all losses
incurred within the policy period. |
|
Aggregate Stop-Loss Coverage
|
An insurance contract in which the employer’s liability for
claims is limited by the group's combined amount. |
|
Agreed Value
|
A value mutually approved by the insurer and insured when
a property insurance policy is established; these are often used when insuring irreplacable property under a valued policy. |
|
Airworthiness Certificate
. |
An official document issued by a representative of the FAA
after an inspection finds that the aircraft is safe for normal operation; aircraft lacking a valid airworthiness certificate are typically excluded from aviation insurance policies |
|
Aleatory
. |
The idea that the performance of an insurance contract
depends upon an unpredictable event that may or may not occur, meaning that either the insurer or insured may receive unequal value for his contribution depending on the extend of a loss; for example, a policyholder who pays premiums but never submits a claim |
|
Alien Insurer
|
An insurance provider domiciled outside the United States.
|
|
All-Cause Deductible
|
A deductible which applies to expenses incurred for any
number of accidents or illnesses occurring during a calendar year; an all-cause deductible only needs to be met once during the year regardless of how many losses are incurred. |
|
All-or-Nothing
|
When an insured is paid a benefit only if the Social Security
application is denied. If the insured is eligible for Social Security benefits, then the private policy pays nothing. |
|
All-Risk Insurance
|
A property insurance form that covers all physical loss or
damage to covered buildings and personal property except when caused by those perils specifically limited or excluded; also known as "special coverage" or a "special cause of loss form." |
|
Alteration
|
A deceptive act involving unlawfully signing the name of
another person or organization on an official document; also known as "forgery." |
|
Ambulatory Outpatient Care
|
Any medical procedure where diagnostic testing and
treatment is provided without a hospital stay. |
|
American with Disabilities Act (ADA)
|
A federal act that states, among other things, that employers
with 15 or more employees cannot discriminate based on a person’s disability. |
|
Annual Open Enrollment
|
The time during which eligible employees can join the
group health plan – usually without evidence of insurability. |
|
Annual Renewable Term (ART)
|
A term life insurance renewability option where the policy
is renewed for a term of one year, and premiums are recalculated along with each annual renewal. |
|
Annual Total Return
|
Annual return of a fund includes the effects of reinvested
distribution and any appreciation in share price, less any sales charges and other fund expenses. |
|
Annual Total Return
. |
Appreciation in share price minus sales charges and other
fund expenses |
|
Annuitant
|
The owner of an annuity.
|
|
Annuitization
|
The conversion of annuity funds into periodic income
payments. |
|
Annuitize
|
Term used to describe when an annuity matures, and the
annuity period begins. |
|
Annuity
|
A contract issued by an insurance provider that guarantees a
stream of income for a set period of time. |
|
Annuity Phase
|
The period of time in which an annuity's accumulated
monies are paid to the policyowner; the second major stage of an annuity's life cycle. |
|
Annuity Units
|
Term used to describe accumulation units that have been
converted upon maturation of an annuity; the provider calculates how long the annuitant is expected to live after the annuity matures, spreads the annuity units out over that period, and provides the annuitant with a dollar amount equal to scheduled annuity units each pay period. |
|
Any Occupation
|
Term used to describe any job befitting the education,
experience, and training of the insured; an "any occupation" disability income policy pays benefits to an insured who has suffered an injury or illness and subsequently cannot obtain a job befitting the insured's qualifications. |
|
Apparent Authority
. |
The authority an agent appears to possess in the eyes of the
insured due to specific actions he undertakes, regardless of whether that authority actually exists; for example, if an agent is not allowed to collect premiums and immediately bind coverage, but does so anyway, the insurance company would likely be held responsible for those policies. |
|
Applicant
|
An individual who requests an insurance policy.
|
|
Applicant Control
|
A provision of an insurance policy which allows for a third
party to own a policy covering someone else( a parent purchasing a life insurance policy for her child, for example); also known as an "ownership clause." |
|
Application
|
A statement of information provided by someone seeking
insurance, enabling insurance companies to assess the acceptability of an applicant’s risk. |
|
Appoint
|
The act of a state insurance department authorizing an
insurance agent to conduct business in that state. |
|
Appraisal
|
A condition found in some property insurance policies that
establishes procedures for either party to request an independent assessor if the insurer and insured cannot agree on an appropriate settlement amount; when an appraisal occurs, both parties hire and pay for the services of their own assessors (known as appraisers) who in turn appoint an umpire to consult in determining a binding settlement amount. |
|
Arbitrage
|
The buying or selling of stock in different exchanges to
exploit differences in price between the exchanges. |
|
Arbitration
|
A condition found in property insurance policies that
establishes procedures to settle a dispute between two parties; the arbitration process is similar to that of appraisal with the disagreeing parties hiring two appraisers and an umpire to render a final decision. |
|
Assessable Stock
|
A class of stock in which the issuing company is allowed to
demand payment from the holder for the balance of the par value; no longer in existence in the United States. |
|
Asset
|
An item of value owned by an individual or corporation;
includes property, inventory, equipment, accounts receivable, and cash. |
|
Asset Based Fee
|
Annual fee charged to manage an investor's account,
calculated based on the size and complexity of the portfolio; may be charged in lieu of 12b-1 fees. |
|
Assigned Risk Insurance Pool
|
A state-operated program that assists consumers with
excessively high risk factors in obtaining insurance to comply with state laws. |
|
Assignee
|
The party who receiving the rights of an assignor.
|
|
Assignment
|
The transfer of a insurance policy's benefits directly back to
the insurer, which relieves the insured of the responsibility to first pay costs out-of-pocket before receiving reimbursement from the insurer. |
|
Assignment Condition
|
A provision found in some insurance policies which states
that the policy is non-transferable without the written consent of the insurer, except in the case of the insured's death (whereby the policy automatically transfers to a legal representative of the insured); also known as the "transfer of rights or duties under this policy" condition. |
|
Assignor
|
The party who transfers all of the legal rights of an
insurance policy to another party (the assignee). |
|
Assisted Living Facility
|
A residential facility that provides limited medical care to
residents who require intermittent care. |
|
Associated Person
|
Any person registered with the SEC and directly or
indirectly controlled by a FINRA member firm. |
|
Assumed Interest Rate
|
Interest rate assumed by an insurance company when it
issues a policy based on the performance of the securities in which assets are invested. |
|
Assumed Liability Coverage
|
Insurance designed to protect a business that is
contractually obligated to assume responsibility for specific liability risks; also known as "contractual liability coverage." |
|
Assumption of Risk
|
The claim by an insurer that the insured is aware of a
dangerous activity, and is therefore fully liable for any injury or loss related to that activity. |
|
Attained Age
|
The age of a policyowner on the date that a term life
insurance policy is renewed. |
|
Attending Physician’s Statement (APS)
|
A written statement from an insurance applicant's personal
physician, or any medical facility that has treated or is currently treating the applicant; this statement provides information about specific medical conditions disclosed in the insurance application or discovered during a physical examination. |
|
Attractive Nuisance
|
Any object or feature on a policyholder's insured property
that represents an inherent danger and is likely to attract children, such as a trampoline or a swimming pool. |
|
Authorized Insurers
|
Insurers that meet the state's legal requirements for
conducting insurance business; also called admitted insurers. |
|
Authorized Shares
|
The number of shares of common stock a corporation is
allowed to sell; specified in the original charter when a corporation is formed. These may be issued shares, unissued shares, treasury stock, or outstanding stock. |
|
Auto
|
A motor vehicle, trailer, or semi-trailer that is subject to
motor vehicle laws and designed for travel on public roads. |
|
Automatic Enrollment
|
If an individual is eligible for Social Security benefits, she
is automatically enrolled in Medicare Part A at no charge, meaning that she doesn't have to apply to be eligible for benefits. |
|
Automatic Premium Loan (APL) Provision
|
A condition found in life insurance contracts which
authorizes the insurer to deduct money from the policy's cash value amount to pay the policy premium, which is then treated as a policy loan on which the insurer charges interest; the APL provision must usually be requested by the insured at the time of application, because most insurers do not permit this provision to be added ocne the policy is issued. |
|
Automatic Sprinkler System
|
Any automatic fire protective or extinguishing system and
its components (including but not limited to sprinklers, ducts, pipes, tanks, pumps, and private fire protection mains), and automatic system-supplied hydrants, standpipes, and outlines. |
|
Automatically Convertible Policy
|
A type of interim term policy that is written to
automatically convert to permanent coverage on the date specified in the policy. |
|
Automobile Insurance
|
Protects against financial losses resulting from theft or
accidents involving the policyholder's vehicle. |
|
Aviation Exclusion
|
An exclusion found in life insurance policies that denies
coverage to an insured who dies as a result of military, crop dusting, student, or test pilot aviation activities; this exclusion does not apply if the insured is a fare-paying passenger on a commercial airline. |
|
Back-End Load Funds
|
Mutual funds that have no sales charges when shares are
purchased, but charge fees on a declining basis each year instead; also referred to as deferred-load funds. |
|
Backdating Records
|
Prohibited practice of changing transaction dates to gain a
tax or other advantage. |
|
Backing Away
|
Prohibited practice of committing to a bid or offer price on
a security and then failing to buy or sell a minimum quantity of that security when a qualified party attempts to complete the transaction. |
|
Bail Out Provision
|
A condition found in annuities that allows annuitants to
surrender a policy without a surrender charge if the interest rate drops to a specified level during a specified time period. |
|
Bailee
|
A person or business with temporary possession of an
insured's property; for example, an auto mechanic becomes a bailee when an insured drops off his car for repair. |
|
Bailee Exposure
|
Liability arising from taking another person's vehicle into
the custody or care of a bailee. |
|
Bailees’ Policy
|
An inland marine insurance endorsement that covers
movable property in a bailee's possession, regardless of location; bailees' policies always use nonfiled forms, and do not contain descriptions of the property covered under the policy. |
|
Balance of Payments
|
The flow of money between the United States and other
countries. |
|
Bank Secrecy Act (BSA)
|
Federal act that requires financial institutions, including
banks and brokerage firms, to track transactions which have a high degree of usefulness in criminal, tax, and regulatory investigations and proceedings; also requires institutions to report suspicious activity (e.g. transactions involving $10,000 in cash or transfer of at least $3,000 in funds). |
|
Basic Cause of Loss Form
|
The most limited form of property insurance; coverage is
provided only for eleven named perils. |
|
Basic Illustration
|
An illustration that shows the influence of both guaranteed
and non-guaranteed elements of a life insurance policy. |
|
Basic Medical Expense Insurance
|
A type of health policy that provides limited benefits for
medical, hospital, and surgical costs without requiring the insured to pay a deductible or other fee before coverage begins; also known as "first-dollar coverage." |
|
Bear Market
|
A general decline in the stock market over time.
|
|
Beneficiary
|
The person designated by a policyowner to receive the
proceeds of a life insurance policy’s benefits upon the death of the insured. |
|
Beneficiary Provision
|
Names the insured’s beneficiaries and sets forth rules
regarding benefits distribution. |
|
Benefit Payable
|
The face value of a life insurance policy; remains constant
over the life of the policy. |
|
Benefit Period
|
The maximum length of time that benefits are paid to an
insured under an insurance policy. |
|
Benefit Schedule
|
A description of the covered health services HMOs or PPOs
provide to a subscriber (insured). |
|
Beta
|
A measure of the risk factor of a security as compared to the
market. Higher beta implies higher risk. |
|
Bid Price
|
Highest available price at which securities are sold in an
exchange market. |
|
Bilateral Contract
|
A contract that exists between two parties - the insurer and
insured; also known as a "two-party contract." |
|
Bind
|
The authority of an agent to begin coverage before an
insurance policy has become a formal contract. |
|
Binder
|
A temporary written or oral contract issued to enforce an
insurance agreement before the policy can be properly processed and issued; a binder is subject to premium payment and all policy terms. |
|
Binding Receipt
|
A receipt of insurance purchase that provides automatic
coverage for a set period of up to 60 days, starting the day application for insurance is made; coverage remains in force until the insurer approves the application or the coverage period expires, whichever occurs sooner. |
|
Black Out Period
. |
Term used to describe the time period that begins when a
deceased individual's surviving children stop collecting Social Security benefits, and ends when the surviving spouse is eligible to begin collecting retirement benefits |
|
Blanket Health Policy
. |
Health insurance that provides limited health benefits for
groups whose membership constantly fluctuates, such as students; blanket health policies typically include a combination of hospital, medical, and surgical benefits |
|
Blanket Insurance
|
A single property insurance policy that covers a group of
items (such as a house and its contents), or multiple properties (such as a house and an office building) owned by the same person. |
|
Blue-Sky Laws
|
1) State laws that make it mandatory for issuers of
securities to register their offerings with the state before those securities can be sold to the state's residents; majority include provisions regarding fraudulent activities and the licensing/registration of people selling securities; 2) General term used to refer to state securities laws. |
|
Bodily Injury
|
Term used to describe physical injuries (including death) of
another person, along with associated expenses and financial losses. |
|
BOE Insurance
|
Insurance designed to protect a business in the event that
the owner is incapacitated and cannot pay overhead expenses; this type of policy covers such expenses as rent/mortgage payments, utilities, equipment leases, and employee salaries, but does not owe the owner any replacement income or compensation. |
|
Bond
|
Legal obligation by a government entity or issuing
company to repay principal amount of a loan issued to bond investors, plus interest, on the maturity date. |
|
Bondholder
|
An investor who has loaned money to a company or
government in the form of a bond. |
|
Boycott
|
Prohibited practice of attempting to constrain competition
by organizing a campaign to deter consumers from doing business with a competitor or other company. |
|
Breach of Legal Duty Owed
|
Term used to describe a liable party's actions (of lack of
actions) that in some way violate the legal responsibility to an injured party. |
|
Breakdown
|
A direct physical loss of covered equipment requiring repair
or replacement due to any of the following: malfunction of pressure or vacuum equipment; electrical malfunction; mechanical failure; or explosions of steam boilers, engines, or turbines. |
|
Breakpoint
|
Sales charge discount for persons who make significant
investments in a single fund. |
|
Broad Cause of Loss Form
|
A form of property insurance that provides coverage against
all the perils listed under the basic cause of loss form, as well as several additional perils; the broad cause of loss form also includes coverage for loss due to falling objects; glass breakage; water damage; weight of ice, sleet or snow; and collapse. |
|
Broad Theft Coverage
|
An endorsement that can be purchased for an additional
premium that adds theft coverage to a dwelling insurance policy. |
|
Brochure
|
Written statement of material information about an
investment adviser's background and practices; the USA requires investment advisers to provide these to prospective clients. |
|
Broker
|
A licensed person or group compensated to monitor and
review various insurance options for the benefit of the insured |
|
Broker Dealer
|
A person or firm buying and selling securities on behalf of
itself (dealer) or others (broker). |
|
Broker Dealer
|
Firm that engages in the buying and selling of securities on
behalf of itself (dealer) or others (broker). |
|
Broker/Agent
|
Any individual, corporation or legal entity engaged in
securities transactions on behalf of others. |
|
Brokerage and Research Services
|
Executing trades of securities for clients and/or analyzing,
advising, and reporting to clients regarding securities, economic, market and financial trends; does not include the practice of authoring articles contained in mass market publications. |
|
Builders Risk Coverage Form
|
A commercial property insurance form that covers
buildings while they are still under construction, or being remodeled or renovated. |
|
Builders Risk Reporting Form
|
An endorsement attached to a builders risk coverage form
that requires the builder to report, in writing, the building’s value each month so coverage amounts may be adjusted; penalties may be assessed if the builder fails to file these reports. |
|
Building
|
A relatively permanent, enclosed structure over a plot of
land; a building is tangible property that can be seen and touched. |
|
Bull Market
|
A period during which investing activity increases.
|
|
Burden of Proof
|
The responsbility to prove a specific legal position in a
court of law. |
|
Burglary
|
The act of taking property unlawfully from the premises of
another person by identifiable forcible entry or exit, and accomplished through use of tools, chemicals, explosives, or electricity. |
|
Business Continuation Agreement
|
An agreement that provides for the continuation of a
business should the sole proprietor die; otherwise the business would legally cease to exist. |
|
Business Continuation Plan
|
Any plan utilized by business owners as a way to protect
the business in the event that the owner or another key employee becomes disabled due to a serious injury or illness; examples of business continuation plans include buy-sell agreements, BOE insurance, disability buyout insurance, and key person disability insurance. |
|
Business Cycle
|
Repeated economic cycle consisting of four stages:
expansion, peak, contraction, and trough. |
|
Business Floater
|
An inland marine insurance endorsement designed to
protect business owners from loss due to destruction or theft of property required to conduct regular operations. |
|
Business Income Form
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A commercial property insurance form that covers loss of
business income and liability for operating expenses (such as payroll) during the period of restoration, subject to standard conditions and limitations. |
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Business Income from Dependent Properties Form
|
A commercial property insurance form that provides
benefits in the event that a dependent property (for example, a business's manufacturer or primary retail store) is impaired, causing a loss of income for the primary business. |
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Business Income with Extra Expense Form
|
A commercial property insurance form that combines
income and extra expense coverage into a single form; for example, a business that shuts down its storefront but continues to process online sales would take advantage of this form. |
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Business Liability Coverage
|
Insurance designed to protect a business in the event of
legal liability due to bodily injuries, property damage, and personal/advertising injuries. |
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Business Owner Policy (BOP)
|
A multiline policy that combines commonly required
coverages into a single package for small businesses; BOPs typically include property, business interruption, crime, vehicle, liability, and flood insurance. |
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Buy-Sell Agreement
|
An agreement used to fund a business continuation
agreement; a buy-sell agreement typically entails transfer of ownership to another entity, or the surviving partners of the business buying out the deceased's shares of the company from the heirs. |
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Buyer’s Guide
|
A standard publication delivered to consumers by an
insurance provider or producer that explains the general concepts of insurance. |
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Cafeteria Plan
|
A group health insurance plan that offers a wider range of
coverage options than a traditional major medical policy; employees can choose the benefits that best suit their specific needs, and fund the plan with pre-tax income. |
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Call Option
|
Option giving an investor the right to buy shares of a
security at a set price within a specified time period. |
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Camera and Musical Instrument Dealers’ Coverage Form
|
A dealers' policy that covers any damage to an insured's
cameras or musical equipment, as well as those owned by others and in the care, custody, or control of the insured. |
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Cancellation
|
Term used to describe when either the insurer or insured
terminates an insurance policy before the end of its term. |
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Capital
|
Financial assets.
|
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Capital Conservation
|
An approach to purchasing life insurance which allows the
insured to preserve the principal investment after death; the insurer only pays interest earned on the principal to beneficiaries, leaving the principal intact to be dispersed as the insured sees fit. |
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Capital Gain
|
Increased value of an investment that makes it worth more
than the purchase priced; realized at the time the investment is sold. |
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Capital Liquidation
|
A life insurance payout method that combines the principal
and earned interest; upon the insured's death, this combined amount is dispersed to beneficiaries in fixed periodic payments. |
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Capital Sum
|
The amount paid to an insured or beneficiary (the face
value of the policy) as a result of the insured's death, or the insured's loss of use of multiple primary body parts. |
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Capitalization
|
Raising money for growth or startup of a company,
typically via the sale of stocks and/or bonds. |
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Capitation
|
A method of payment in which an insurer prepays a fixed
amount to a physician or hospital for each person in a particular plan, regardless of the frequency or type of service actually provided; if services provided by the physician exceed the amount paid by the insurer, the physician incurs the loss. |
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Captive Insurance Company
|
A stock insurance company that is owned by another
company to which it provides insurance. |
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Cargo
|
Property being transported by a vessel, whether that
property is owned by the vessel or a third party. |
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Carryover Provision
|
Allows medical expenses incurred during the last three
months of a calendar year to be carried over to the next year to meet next year's deductible requirements. |
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Cash Account
|
An account requiring the investor to deposit the full
purchase price of securities rather than buying on credit. |
|
Cash Compensation
|
Any discount, concession, fee, service fee, commission,
asset-based sales charge, loan, override or cash employee benefit received in connection with the sale and distribution of investment company securities. |
|
Cash or Deferred Arrangement (CODA) Plan
|
An employee benefit plan that allows employees to
postpone a portion of their present salary in order to save for retirement; a popular example is the 401(k) plan, a salary reduction arrangement based on a specific section of the tax code. |
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Cash Surrender
|
Occurs when a life insurance or annuity policyholder
voluntarily terminates the contract before maturity; the insured pays ordinary income tax on any earnings above the original premium paid. |
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Cash Surrender Value
|
The amount that an insurer pays to a life insurance policy or
annuity owner in the event that the policy or annuity is voluntarily terminated before maturity or the insured event occurs; the cash surrender value is the savings component of most permanent life insurance products. |
|
Cash Value
|
The accumulated value that an insurance provider will pay
the policyownerupon surrender of a life insurance policy; a policy's cash value is generated by placing a portion of the policyowner's premium into the insurer's general account for investment purposes. |
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Cash Value Insurance
|
Life insurance policies intended to provide coverage for the
insured's entire life; also known as "whole life insurance" or "permanent insurance." |
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Casualty Insurance
|
Insurance that protects an individual from incurring loss
due to legal liability caused by actions toward others; also known as "liability insurance." |
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Cease and Desist Order
|
Order given by the courts or a government administrative
agency to halt prohibited activities. |
|
Ceding Company
|
An insurance company insured by a reinsurer.
|
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Centers forMedicare andMedicaid Services (CMS)
|
Formerly called the Health Care Financing Administration
(HCFA). The CMS falls under the umbrella of the Department of Health and Human Services (DHHS). Medicare is financed by a portion of the payroll taxes paid by workers and employers. It also is financed in part by monthly premiums deducted from Social Security checks. |
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Certificate of Coverage
|
A legal document that serves as proof that an insurance
policy has been issued; contains a general summary of the policy’s coverage. |
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Certificate of Creditable Coverage
|
A document issued by a health insurer to an individual
whose membership in a group health plan is terminated; this document certifies that the individual, as well as any dependents covered under the terminated group plan, maintained continuous coverage for the applicable period and is entitled to continued coverage provided under HIPAA. |
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Certificate of Deposit (CD)
|
Savings certificate with a maturity date of one month to five
years; insured by FDIC up to $250,000. |
|
Certificate of Insurance
|
The certificate of coverage that each group member covered
under a group insurance plan receives from the master policyowner. |
|
Chinese Wall
|
Information barrier to prevent unauthorized distribution of
nonpublic information; also referred to as a firewall. |
|
Chronically Ill
|
Term assigned to an individual who has been certified by a
doctor or other licensed healthcare worker within the previous 12 months as unable to perform certain basic activities for 90 days, or who requires substantial supervision due to severe cognitive impairment. |
|
Churning
|
Insurance: Prohibited practice of generating additional
commissions by encouraging a customer to replace a life insurance policy with a new one through use of misrepresentations and false statements. Securities: Prohibited practice of excessive trading designed to generate commissions without regard to the benefit of the |
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Civil Rights Act of 1964
|
A federal law that was amended to require that women
affected by pregnancy, childbirth, or related medical conditions be treated the same in terms of employment and employment-related purposes as other people who are in similar positions but affected differently. |
|
Claim
|
A formal request or demand for payment by an insured
based on an occurrence or event covered under an in-force insurance policy. |
|
Claim Settlement
|
The resolution of the insured's request for payment
associated with an unforeseen event covered under an in-force insurance policy. |
|
Claimant
|
Term used to describe the injured party involved in an
insurance claim. |
|
Claims Adjuster
|
A professional who investigates losses reported by insureds;
a claims adjuster's analysis helps determine whether losses are covered by the insurance policy and how much compensation should be issued to cover the loss. |
|
Claims Options
|
The variety of choices available to an insured for the
method of benefit payments upon submitting a claim. |
|
Claims Reserves
|
Premium reserve funds that have been assigned to a claim
but not yet paid; also known as "loss reserves." |
|
Claims Tail
|
Term used to describe claims submitted after a policy
expires. |
|
Claims-Made Basis
|
Term used to describe an insurance policy that only pay for
losses when a claim is made, and not when the event occurs. |
|
Claims-Made Form
|
An insurance policy under which coverage is based on
when the claim is made, not when the damage or injury occurred. |
|
Class A Shares
|
Mutual funds with front-end sales loads.
|
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Class B Shares
|
Mutual funds with back-end or deferred- load funds.
|
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Class C Shares
|
Mutual funds that do not use the services of an underwriter
and do not charge sales charges; also referred to as no-load funds; expenses are funded with 12b-1 Asset-Based fees. |
|
Class Designation
|
A manner of designating a group of people to equally share
in the benefits of a policy; for example, a parent may name the beneficiary of her estate as “all my children” instead of listing each of them by name. |
|
Class Rating
|
A method of premium calculation in which an underwriter
consults a manual containing pre-determined premium rates for each category of risk; also known as "manual rating." |
|
Clearing Agency
|
Self-regulatory organization that intermediates payment and
delivery in securities transactions or compiles comparison data with regards to such transactions. |
|
Closed-End Management Company
|
An investment company that offers a fixed number of
non-redeemable shares on a secondary market; share prices are determined by supply and demand rather than net asset value. |
|
Closed-Panel HMO
|
A type of HMO that limits the number of health providers it
works with in order to manage costs; to receive services, the HMO's subscribers must use the closed-panel providers to receive covered health care services. |
|
Co-Insurance Penalty
|
A charge assessed to property insurance policyholders who
fail to purchase enough insurance to cover the property; the minimum amount of coverage (usually 80% of the property's value) is specified in the policy, and an insured who fails to purchase coverage at this minimum value does not receive full benefits if a claim is submitted. |
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Co-Pay
|
A flat fee that an insured must pay when receiving health
care services; co-pays are utilized by insurance providers to share the cost of medical expenses. |
|
Code of Arbitration Procedure
|
Process governing the resolution of disputes in the financial
industry. |
|
Code of Procedure
|
FINRA’s disciplinary regulations for handling complaints
that members have violated the Conduct Rules. |
|
Coercion
|
The practice of forcing another party to behave
involuntarily by use of threats, rewards, or other actions; considered an unfair trade practice by most state insurance codes. |
|
Coinsurance
|
The insured's shared amount of medical expenses, based on
established ratios above the deductible amount; for example, coinsurance may require the insured to pay 20% of all medical bills. |
|
Collapse
|
The abrupt falling down or caving in of a building or a part
of a building, to the degree that the property cannot be occupied for its intended purpose. |
|
Collateral
|
Item of value pledged as security against a debt; may be
subject to seizure upon default of a loan. |
|
Collateral Assignment
|
An assignment of rights under an insurance policy for
collateral purposes; also known as a "temporary" or "partial" assignment. |
|
Collision Coverage
|
Pays to repair or replace an insured's vehicle when involved
in an accident; offered under the "Part D" section of automobile insurance. |
|
Combination Annuity
|
An annuity where premiums are invested in both the
insurance company's general funds and a separate growth-oriented account. |
|
Combination Plan
|
Applies coinsurance rates by the insurer's fee structure, or
the doctor or dentist's fee structure, one for routine treatments and another for nonroutine treatments. |
|
Combined Ratio
|
The sum of the loss ratio and the expense ratio; a ratio
below 100% indicates an insurer is profiting, while ratios above 100% indicate that an insurer is losing money. |
|
Combined Single Limit
|
A stated limit of liability amount available for one
occurrence or accident; for example, $200,000 to cover all damage claims arising from an automobile accident. |
|
Commercial (Health Service Providers)
|
Insurers that write health insurance policies to reimburse
the insured for medical care according to policy terms. |
|
Commercial Articles Coverage Form
|
An inland marine insurance endorsement that protects the
owners of commercial cameras, musical instruments, and similar equipment in the care, custody, or control of an insured. |
|
Commercial Line Insurance
|
Insurance designed to protect a business; examples include
commercial property and workers' compensation insurance. |
|
Commercial Package Policy (CPP)
|
A customized multiline insurance policy that contains two
or more elements of insurance coverage combined into a single package. |
|
Commercial Property Floater Risks
|
An inland marine insurance endorsement that encompasses
the 11 filed coverage forms and several nonfiled forms, which fall into four general categories; equipment floaters, business floaters, dealers policies, and bailees policies. |
|
Commercial Property Insurance
|
Protects business owners' buildings and inventory against
damage from fire, theft, and weather; usually combines property and casualty coverage. |
|
Commingling Funds
|
Mixing personal funds with the insured’s or the insurance
company’s funds. |
|
Commingling Shares
|
Mixing shares belonging to a customer with those
belonging to an investment firm. |
|
Common Disaster Clause
|
A provision found in life insurance policies that sets forth
the presumption that in the case of a common accident (disaster) in which both the primary beneficiary and the insured die, the insured is always assumed to have survived the beneficiary. |