Dictionary of Financial Terms -
- Association of British Insurers
- stands for Annual Equivalent Rate and usually specifies the
interest paid from current, deposit or savings accounts. This new term replaces CAR (Compound Annual Rate) which
denoted much the same thing.
- Acceptance letter
- An offer of life assurance, setting out the terms.
- Access To Medical Records Act 1988
- The terms of this Act require an insurance company to obtain prior
written consent from an individual before approaching any medical practitioner for a medical report pertaining to them.
The individual has certain other rights including the right (subject to some restrictions) to see any report before it
is submitted by the doctor.
- Accidental Death Benefit
- A provision that may be added to a life insurance policy which
provides payment of an additional benefit in the case of death resulting from an accident.
- Accidental Death and Dismemberment
- Loss of life or limbs through accident. Insurance against such
eventualities is generally available.
- Act of God
- An accident or event which happens independently of human
intervention and due to natural causes such as storm earthquake etc. which no human foresight can provide against.
Suggesting that an event was an "act of God" may be a defence in English law against a claim for liability since it may
be held that it could not have been foreseen or safeguarded against.
- Actively at Work
- A clause in a group insurance policy that requires a new member or
one with an increase in cover, to be at work (or on holiday i.e. not absent due to sickness, industrial action, etc.)
on the day of joining/day of increase.
- Activities of Daily Living
- Everyday living functions and activities performed by individuals
without assistance. These functions include mobility, dressing, personal hygiene and eating. The inability to undertake
these activities may be used in some circumstances to define disability in insurance contracts.
- A professional trained in the technical aspects of insurance and
its related fields, particularly in the mathematics of insurance, for example, the calculation of premiums and
reserves. An actuary will use complex mathematical methods, often with the aid of computers, to provide analysis of
claims data and other statistics. In certain circumstances insurance companies, pension schemes etc. are required to
have documents, calculations etc. certified by an actuary. In this and other legal contexts the word means a qualified
Fellow of the Institute or Faculty of Actuaries.
- Accidental Death and Dismemberment
- Additional Borrowing
- Similar to a traditional current account overdraft. It is the extra
money you can borrow on top of what you've already borrowed. Your Additional Borrowing = Your Agreed/Total Facility -
- Additional Voluntary Contributions
- Pension contributions over and above the pension scheme member's
normal contributions, which secure additional benefits for the member or his or her dependants.
- See: Loss Adjuster.
- Activities of daily living.
- Advance Underwriting
- Describes a system used for underwriting members of some group
schemes. Once an underwritten member is accepted for insurance at 'ordinary rates', they may increase their cover by a
predetermined percentage in any year without the need for further underwriting.
- Where an authorised adviser looks at your individual circumstances
and advises on suitable products for your financial needs.
- Advanced Financial Planning Certificate - a professional
qualification for financial advisers obtained by examination through the Chartered Insurance Institute. Holders are
eligible for membership of the Society of Financial Advisers.
- Age Allowance
- Increased personal allowance for Income Tax for persons aged over
65. A further increase is available to persons over 75.
- Someone who acts on behalf of another. Traditionally, insurance
company salesmen have often been called agents. This has led to a certain amount of confusion since in some situations
they are acting on behalf of the client and at other times they are acting on behalf of the insurance company: the
distinction is not always clear.
- All Risks
- Extension of the cover provided by household insurance to damage,
theft if outside the home, etc. in respect of individual high value items.
- Allocation rate
- This is the percentage of your payment that is actually invested
(e.g. 75%) after initial charges have been taken into account.
- Alpha is the term used to describe the risk adjusted outperformance
of an investment. A large alpha indicates good performance relative to the market.
- Alternative Dispute Resolution
- A means of resolving disputes without resort to the Courts.
Particularly used in relation to disputes between pension schemes, trustees and members.
- Amount purchased or sold in Gift Fund Pools as a result of a
contribution or miscellaneous activity.
- Access To Medical Records Act 1988.
- person who studies particular stock markets or industry sectors and
makes buy or sell recommendations regarding the shares of specific companies within them. These are arrived at through
a combination of research, economic statistics and, frequently, visits to the companies themselves. For example, in
1998 alone, Flemings' analysts have made over 3,000 company visits around the world. (See also Fund Manager)
- Annual Percentage Rate (APR)
- This rate takes into account all the costs, interest charges,
arrangement fees etc. Theoretically it allows you to compare mortgages on a like for like basis. However, you need to
be careful as different lenders calculate it in different ways.
- Annual management fee
- A charge made every year for running your fund. It is usually a
percentage of the amount you've got invested.
- Annual Report
- A voluntary report published by a foundation or corporation
describing its grant activities. It may be a simple typed document listing the year's grants or an elaborately detailed
publication. A growing number of foundations and corporations use annual reports to inform the community about their
contributions activities, policies, and guidelines. (This annual contributions report is not to be confused with a
corporation's annual report to stockholders.)
- Annual Volatility
- Volatility is one measure used to assess the risk of a portfolio as
it helps to describe the likely range of returns achieved by the fund. In statistical terms it is the standard
deviation of the return distribution. Greater volatility of monthly fund returns means that there is a wider range of
likely returns in the future, or greater uncertainty regarding the fund return. Most investors would equate this
greater uncertainty with greater risk.
- The person entitled to receive payments from an annuity
- A series of payments, possibly subject to increases, made at
specified intervals until a particular event occurs. Most commonly an annuity will cease after a specified period or
upon the death of the annuitant.
- Annuity Certain
- A contract that provides payments for a specified number of years,
regardless of life or death of the annuitant
- Approved Scheme
- A pension scheme that is approved by the Inland Revenue under the
relevant legislation. Members and their employers are able to obtain certain tax advantages in respect of contributions
and/or benefits. (See Exempt Approved Scheme).
- 1. Annual Percentage Rate. This is the compounded rate used to give
a standard comparison of the amount of interest you are likely to pay on loans or outstanding credit card balances. 2.
A statutory method of calculating the Annual Percentage Rate of charge to repay the total charge for credit over the
period of the loan. 3. Allows customers to compare like with like when comparing costs between different lenders.
- profiting from the differences in price when the same security,
currency or commodity is traded on two or more markets.
- A means of arriving at an acceptable agreement between two
disputing parties. An independent person or body hears the arguments of both parties and makes a decision that is then
binding on all concerned. Often conducted by members of the Institute of Arbitrators.
- another word for the investments which a unit trusts holds within
- The transfer of one person's interest in a legal right or duty to
another person or organisation.
- Association of British Insurers
- An association representing some 450 insurance companies which
account for over 95% of the business transacted by UK insurance companies. Is the forum through which UK insurance
companies collectively liaise with Government Departments and other bodies. Brings insurance companies together to set
industry standards and codes of practice.
- the Association of Unit Trusts and Investment Funds, which is the
industry trade body of unit trusts and investment trusts management companies.
- Apportionment of loss on an equitable basis.
- Average Annual Return
- Average Annual Return is used to compare returns over different
periods on a consistent basis with the unit being years, hence per annum. Normally only returns over periods greater
than one year are annualised. The average annual return is the rate that an investor would have earned in each year to
achieve the total cumulative return over the period.
- Aviation Hazard
- The extra hazard of death or injury resulting from participation in
aeronautics, usually as other than a fare-paying passenger in licensed aircraft. For insurance, this often requires an
extra premium or the exclusion of certain risks.
© APT Finance. All Rights Reserved
| Legal Disclaimer |