Financial Glossary

F

Face amount
The amount stated on the face of the policy that will be paid on the death of the life insured or at the maturity of the policy. It does not include additional amounts payable under accidental death or other special provisions, or acquired through the application of policyholder dividends. Also called the "sum insured".
Failed Transaction
A securities transaction in which the securities and cash are not exchanged as agreed on the settlement date.
Family Policy
A life insurance policy providing insurance on all or several family members in one contract, generally whole life insurance on the principal breadwinner and small amounts of term insurance on the other spouse and children, including those born after the policy is issued.
Federal Crop Insurance
Comprehensive coverage at rates subsidized by the federal government for unavoidable crop losses, including those that result from hail, wind, excessive rain, drought, freezes, plant disease, snow, floods, and earthquake.
Fiat Money
Fiat Money is paper currency made legal tender by law or fiat. It is not backed by gold or silver and is not necessarily redeemable in coin. This practice has had widespread use for about the last 70 years. If governments produce too much of it, there is a loss of confidence. Even so, governments print it routinely when they need it. The value of fiat money is dependent upon the performance of the economy of the country that issued it. Canada's currency falls into this category.
Fiduciary
A person who holds something in trust for another.
Final Average Formula
A pension plan formula that bases retirement benefits on earnings during recent years of employment.
Financial Administrators Section (of the IDA)
A sub-committee of the Investment Dealers Association of Canada, comprised of financial officers of member firms, which looks at such matters as internal controls and capital and insurance requirements; stock exchange representatives attend as observers.
Financial Planner
An investment professional who assists individuals with long- and short-term financial goals.
First To Die Coverage
This means that there are two or more life insured on the same policy but the death benefit is paid out on the first death only. If two or more persons at the same address are purchasing life insurance at the same time, it is wise to compare the cost of this kind of coverage with individual policies having a multiple policy discount.
Fixed Annuity
Annuity whose periodic payment is a guaranteed fixed amount.
Flat Schedule
A type of schedule in group insurance under which everyone is insured for the same benefits regardless of salary, position, or other circumstances.
Flexible Premium Policy Or Annuity
A life insurance policy or annuity under which the policyholder or contract holder may vary the amount or timing of premium payments.
Flexible Premium Variable Life Insurance
A life insurance policy that combines the premium flexibility feature of universal life insurance with the equity-based benefit feature of variable life insurance.
Foreclosure
A legal procedure whereby the lender obtains ownership of the property following default by the borrower.
Foreign Exchange
The trading of currencies against each other.
Forfeitures
Amounts contributed on behalf of terminated, non-vested participants. In a pension plan, such amounts must be applied to reducing future employer contributions. In a profit-sharing plan, such amounts may be allocated to the accounts of remaining participants.
Fortuitous Loss
Unforeseen and unexpected loss that occurs as a result of chance.
Franchise Insurance
A form of insurance in which individual polices are issued to the employees of a common employer or the members of an association under an arrangement by which the employer or association agrees to collect the premiums and remit them to the insurer.
Fraternal Benefit Society
A company that is formed to provide insurance and social benefits to a group of people (members) sharing some common background, such as culture, religion or occupation.
Fraternal Insurance
A cooperative type of insurance provided by social organizations for their members.
Fraternal Life Insurance
Life insurance provided by fraternal orders or societies to their members.
Fraternal Society
A social organization that provides insurance for its members.
Funded Retirement Plan
A plan under which funds are set aside in advance to provide expected benefits
FundSERV
The processing facility of a number of mutual fund companies.
Future
Contract covering the sale of financial instruments or physical commodities for future delivery on a commodity exchange.