Financial Glossary

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Accelerated Death Benefit Rider
A life insurance policy rider that allows the policy owner to receive a portion of the policy's death benefit while still living, providing the insured person is inflicted with a terminal illness and has a limited life expectancy. Also referred to as a living benefits rider.
Accident and Health Insurance
A type of coverage that pays benefits, sometimes including reimbursement for loss of income, in case of sickness, accidental injury, or accidental death.
Accidental Death And Dismemberment Insurance
A form of health insurance that provides payment in the event of death or loss of one or more bodily members (such as hands or feet) or the sight of one or both eyes as a result of an accident.
Accidental Death Benefit
A benefit in addition to the face amount of a life insurance policy, payable if the insured dies as the result of an accident. Sometimes referred to as "double indemnity".
Accounting
The process of recording, summarizing, and allocating all items of income and expense of the company and analyzing, verifying, and reporting the results.
Accrued Income
Income that has been earned but not yet received. For instance, if you have a non-registered Guaranteed Investment Certificate (GIC), Mutual Fund or Segregated Equity Fund, growth accrues annually or semi-annually and is taxable annually even though the gain is only paid at maturity of your investment.
Accumulation Period
  1. The time between the first premium payment and the first benefit pay out under a deferred annuity
  2. A specified period of time, such as 90 days, during which the insured person must incur eligible medical expenses at least equal to the deductible amount in order to establish a benefit period under a major medical expense or comprehensive medical expense policy
Actual Cash Value
The actual cash value is usually the cost of replacing the property with something of like kind and quality, minus an allowance for depreciation. A deductible may apply. (See Depreciation)
Actuary
A person professionally trained in the mathematical and technical aspects of insurance and related fields, particularly in the calculation of premiums, actuarial liabilities and other values.
Administrative Services Only (AS0) Plan
An arrangement under which an insurance carrier or an independent organization will, for a fee, handle the administration of claims, benefits and other administrative functions for a self-insured group.
After-Hours Trading
Trading that occurs outside of the regular market hours of an exchange or other execution venue.
Agent
A sales and service representative of an insurance company. In a life insurance company, an agent is also often called a life underwriter.
Alberta Stock Exchange (ASE)
Founded through the incorporation of the Calgary Stock Exchange in 1913; trading activity is closely tied to oil and gas discoveries in western Canada; under a restructuring agreement between Canada's exchanges, was combined with the VSE to form the Canadian Venture Exchange (CDNX); in 2001, the CDNX was taken over by the Toronto Stock Exchange.
Alternative Minimum Tax
A method of calculating income tax that disallows certain deductions, credits and exclusions. This was intended to ensure individuals, trusts and estates that benefit from tax preferences do not escape all federal income tax liability. People must calculate their taxes both ways and pay the greater of the two.
American and Canadian Connection for Efficient Securities Settlement (ACCESS)
A CDS service that allows customers to manage all domestic and cross-border activity using CDS accounts while CDS manages cross-border settlement and the relationship with DTC and NSCC on their behalf.
Amortization
Paying an interest-bearing liability by gradual reduction through a series of installments, as opposed to one lump-sum payment.
Annuitant
Individual on whose life the contract depends.
Annuity
A contract that provides an income for a specified period of time, such as a certain number of years or for life. An annuity is like a life insurance policy in reverse. The purchaser gives the life insurance company a lump sum of money and the life insurance company pays the purchaser a regular income, usually monthly.
Application
A signed statement of facts made by a person applying for life insurance and then used by the insurance company to decide whether or not to issue a policy. The application becomes part of the insurance contract when the policy is issued.
Appraised Value
An estimate of the value of the property offered as security for a mortgage loan. Usually completed by an independent accredited appraisal firm.
A.R.M.
Adjustable rate mortgage whereby the rates fluctuate on an ongoing basis as the Prime interest rate at the bank change. A good product for the seasoned mortgage borrower.
Arbitration
A form of alternative dispute resolution where an unbiased person or panel renders an opinion as to responsibility for or extent of a loss.
Asset Allocation
The process of repositioning assets within a portfolio to maximize return for a given level of risk. This process is usually done using the historical performance of the asset classes within sophisticated mathematical models.
Assignment
The legal transfer of one person's interest in an insurance policy to another person.
Association Group
A group formed from members of a trade or a professional association for group insurance under one master health insurance contract.
Association Group Plan
Health insurance plans designed for members of a professional association or trade association. Members may be protected under a group health insurance policy or by individual franchise policies.
Assumption of Mortgage
Assuming or taking over the existing mortgage on the property being purchased. Depending on the terms within the mortgage document this can be done either with or without a qualifying process.
Assurance Insurance
These terms are today generally accepted as synonymous, although not originally so. The term "assurance" is used more commonly in Canada and Great Britain than in the United States.
Assured Payment System
A mechanism whereby a seller delivers securities in exchange for an irrevocable commitment by the buyer's bank to make an unconditional and irrevocable payment to the seller's bank.
Assuris
This is a group of Canadian Life and Health Insurance Companies which have formed a pool insuring all policy holders who are Canadian residents against financial failure of any of the members of the pool. CompCorp’s press release says “In the event a member company is declared insolvent, CompCorp will guarantee payment under covered policies up to certain specified limits for policyholders of that company. This means annuity and disability income payments continue, claims under life and health insurance policies will be paid, and requests for cash surrender will be honored. Policyholders receiving income from annuities and disability insurance with no option of a lump sum cash withdrawal are guaranteed payments up to $2,000 per month. Death claims under covered life insurance policies are protected up to $200,000. Health insurance benefits other than disability income annuities are guaranteed up to $60,000 in total payments. For money accumulation products, limits are similar to those of the Canada Deposit Insurance Corporation (CDIC). Plans registered under the Tax Act, such as RRSPs and RRIFs, are protected up to $100,000 per person. In addition, non-registered plans, and the cash surrender value in life insurance policies are protected up to $100,000 per person”. A consumer brochure is available by contacting Assuris at 1-866-878-1225.
ATM
See Automated Teller Machine.
Attribution Rules
Legislation under which interest, dividends, or capital gains earned on assets you transfer to your spouse will be treated as your own for tax purposes. Interest or dividends relating to property transferred to children under 18 also will be attributed back to you. The exception to this rule is that capital gains relating to property transferred to children under 18 will not be attributed back to you.
Automated Teller Machine (ATM)
Machine at a bank branch or other location that enables a customer to perform basic banking activities such as checking one's balance, withdrawing, transferring and can also include depositing funds when the bank is closed.
Automatic Premium Loan
Cash borrowed from a life insurance policy's cash value to pay an overdue premium after the grace period for paying the premium has expired.