Financial Glossary


Earned Income
Employment income derived from salary, wages, commissions, or fees.
Electronic Funds Transfer (EFT)
The transfer or movement of funds by electronic means.
Electronic Trading
A process whereby securities purchase and sale orders can be placed via the Internet.
Eligibility Date
The date on which an individual member of a specified group becomes eligible to apply for insurance under the (group life or health) insurance plan.
Eligibility Period
A specified length of time, frequently 31 days, following the eligibility date during which an individual member of a particular group will remain eligible to apply for insurance under a group life or health insurance policy without evidence of insurability.
Eligibility Requirements
This term refers to (1) the conditions which an employee must satisfy to participate in a retirement plan, one such condition begin the completion from 1 to 3 years of service with the employer, another the attainment of a specified age, such as 25, or (2) conditions which an employee must satisfy to obtain a retirement benefit, such as the completion of 15 years of service and the attainment of age 65.
Elimination Period
A specified number of days at the beginning of each period of disability during which no disability income benefits are paid. The elimination period may be as short as a few days or as long as one year or more.
Endowment insurance
Life insurance payable to the policyholder, if living at the end of a specified period, called the maturity date, or to a beneficiary if the life insured dies prior to that date.
Life insurance payable to the policyholder, if living on the maturity date stated in the policy, or to a beneficiary if the insured dies before that date. For example, some Term to age 100 policies offer the option of taking the face amount of the policy as a cash pay out at age 100 if the policyholder is still alive and paying all required income taxes on the amount received or leaving the policy to pay out upon death whereupon the pay out is tax free.
Enrollment Card
A document signed by an employee as notice of his/ her desire to participate in the benefits of a group insurance plan.
Investments in the form of ownership of property, usually common stocks, as distinguished from fixed income bearing securities, such as bonds or mortgages.
Errors and Omissions Insurance
Insurance coverage purchased by the agent/ broker that provides protection against loss incurred by a client because of some negligent act, error, oversight, or omission by the agent/ broker.
Estate Planning
Developing a plan to transfer all of your property from one generation to the next or within a generation.
The assets and liabilities of a person left at death.
Evidence of Insurability
Proof, usually in the form of a medical examination, that a person can be insured for life or disability insurance.
Exchangeable (EXC)
A bond that allows the holder the option of "swapping" one issue of bonds for another at a specified conversion rate.
Specific conditions or circumstances listed in the policy for which the policy will not provide benefit payments.
Exclusive Agent
An agent who is employed by one and only one insurance company and who solicits business exclusively for that company.
Exclusive Remedy Doctrine
Doctrine in workers compensation insurance which states that workers compensation benefits should be the exclusive or sole source of recovery for workers who have a job-related accident or disease; doctrine has been eroded by legal decisions.
A person named by the probate courts or the will to carry out the directions and requests of the decedent.
Expense Ratio
The ratio of a company's operating expenses to premiums.
Experience Rating
The process of determining the premium rate for a group risk, wholly or partially on the basis of that group's experience.
Experience Refund
A provision in most group policies for the return of premium to the policyholder because of lower than anticipated claims.
A term used to describe the relationship, usually expressed as a percent or ratio, of premium to claims for a plan, coverage, or benefits for a stated time period.
Expiry Date
The date on which specific events close.
Extended Health Care Insurance
A form of health insurance that provides, in one policy, protection for hospital and medical expenses not covered by government programs and usually other health care expenses, such as prescribed drugs, medical appliances, ambulance, private duty nursing, etc.. The policy may contain a deductible amount, coinsurance and high maximum benefits. Also called "major medical expense insurance".
Extended Term Insurance
A form of insurance available as a non-forfeiture option. It provides the original amount of insurance for a limited period of time.