Financial Glossary

G

Generally Accepted Accounting Principles (GAAP)
General set of accounting standards by which all publicly-traded companies are expected to abide. Financial statements and financial information are required by securities law to be presented in a specific, generally accepted, manner.
GIC
See Guaranteed Investment Certificate.
Grace Period
A specified period of time that a policy owner has to pay renewal premiums without the policy being lapsed (canceled).
Gross Debt Service Ratio (GDSR)
This is the total cost of housing payments (this includes principal, interest, taxes, and sometimes heat and maintenance) divided by the family's total gross income Generally this ratio should not exceed 32%.
Gross Estate
All of the assets and liabilities owned at death.
Gross Premium
The premium paid by the policyholder.
Group Contract
A contract of insurance made with an employer or other entity that covers a group of persons identified as individuals by reference to their relationship to the entity.
Group Creditor Life Insurance
Life insurance provided to debtors by a lending institution to provide for the cancellation of any outstanding debt should the borrower die. Normally term insurance limited to the amount of the loan.
Group Insurance
Insurance issued, usually without medical examination, on a group of people under a master contract. It is usually issued to an employer for the benefit of employees. The individual members of the group hold certificates as evidence of their insurance.
Group Life Insurance
This is a very common form of life insurance that is found in employee benefit plans and bank mortgage insurance. In employee benefit plans the form of this insurance is usually one-year renewable term insurance. The cost of this coverage is based on the average age of everyone in the group. Therefore a group of young people would have inexpensive rates and an older group would have more expensive rates.
Guaranteed Investment Certificate (GIC)
A deposit instrument requiring a minimum investment at a pre-determined rate of interest for a stated term; most commonly available from banks and trust companies.
Guaranteed Purchase Option
Benefit that can be added to a life insurance policy permitting the insured to purchase additional amounts of life insurance at specified times in the future without requiring evidence of insurability.
Guaranteed Renewable Contract
A contract that the insured person or entity has the right to continue in force by the timely payment of premiums for a substantial period of time, during which period the insurer has no right to make unilaterally any change in any provision of the contract, while the contract is in force, other than a change in the premium rate for classes of policyholders.

H

Health Insurance
Insurance against financial losses resulting from sickness or accidental bodily injury.
Hedging
Technique for transferring the risk of unfavorable price fluctuations to a speculator by purchasing and selling options and futures contracts on an organized exchange.
Homeowners Policy
A package of insurance providing homeowners with a broad range of property and liability coverage.
Human Life Value
For purposes of life insurance, the present value of the family's share of the deceased breadwinner's future earnings.