Dictionary of Financial Terms -
- Independent Financial Adviser.
- Inheritance Tax.
- An estimation of the returns you might get from an investment,
based on standard growth rates and taking charges into account. The actual returns you get may be higher or lower than
- Immediate Annuity
- An annuity under which payments commence straight away, in contrast
to a deferred annuity, under which the payments do not commence until later (possibly many years later).
- The Investment Management Regulatory Organisation which regulates
the management of our unit trusts.
- Income Draw-Down
- An option available to members of small self-administered pension
schemes, personal pension schemes and recently extended to occupational scheme members with money purchase benefits or
AVC's. An annuity does not have to be purchased at retirement and can be delayed up to age 75. In the meantime the
individual can 'draw down' income from his pension investment. This can be a high-risk approach to pension provision
and is subject to PSO regulation.
- Income Policy
- A Life Insurance contract that provides income on a monthly or
other periodic basis, as opposed to a policy which pays proceeds in a lump sum.
- Income Protection Insurance
- Income Protection Insurance (also known as Permanent Health
Insurance or PHI) provides a monthly income during periods of long-term illness or disability.
- Income tax
- This is tax you pay on the income you earn each year above a
certain amount. As well as your salary, income tax is also charged on interest and dividends you receive. The amount of
tax you pay depends on the amount of money you earn and on your allowances.
- Payment to reimburse a specific quantifiable monetary loss or
- (Of commission) Paid in full at commencement of a contract on
the assumption that this will remain in force for at least a certain minimum period. If the contract is terminated
within this period part of the commission may be required to be refunded.
- Independent Financial Adviser
- A broker or other intermediary authorised to sell or advise on the
policies offered by any insurance company, as well as other financial service providers.
- Independent Foundation
- A private foundation that is no longer controlled by the original
donor or donor's family.
- A means of continually measuring the movement of a particular set
of statistics over periods of time. Most unit trust fund managers measure their fund's performance against that of an
appropriate 'benchmark' index with the aim of at least matching its progress or, better still, beating it.
- Index linked
- Insurance where the level of cover increases in line with an index
of prices or earnings.
- Index tracking
- An index tracking fund aims to follow a particular index as closely
as possible. It does not aim to beat it. It invests only in the companies that make up that index. Index tracking
removes the need to employ fund managers, which means charges tend to be lower.
- A method by which benefits are increased at periodic intervals by a
factor derived from an index of prices or earnings.
- Individual Savings Account
- A means of saving which gives exemption from tax on benefits.
Savings can be through cash, stocks and shares or insurance but must be arranged through one or more 'ISA manager(s)'.
There are limits to the amounts which can be contributed.
- Industrial Insurance
- Whole of life and endowment insurance with relatively low value
(under £1000 sum assured). Historically, the premiums were collected by an insurance company agent at the
policyholder's home. However, these may now be paid by monthly bank transfer. The legislation governing this type of
insurance is less formal than for 'ordinary branch' and if an insurance company transacts both types of business it is
required to keep them segregated.
- The amount in percentage terms by which prices rise or fall year on
year. In the UK, the primary measure of this is the Retail Price Index (RPI); the underlying rate of
inflation is the RPI with mortgage repayment figures stripped out.
- In Force Business
- Life or Health Insurance that is current and for which premiums are
being paid or for which premiums have been fully paid.
- Inheritance Tax
- This tax is payable at the time of death, on any items (money or
otherwise) where ownership changes on death or within 7 years before. There is no inheritance tax on the first portion
of the deceased person's estate and transfers between husband and wife are exempt. There are other exemptions and the
rules governing these can be complex.
- In-kind Contribution
- Support in the form of goods or services rather than a cash
- Inland Revenue
- The Inland Revenue is the government department responsible for the
assessment and collection of direct taxation on income, capital gains, stamp duties, corporation tax and inheritance
- Inland Revenue Limits
- Limitations on benefits and contributions applied to an approved
occupational pension scheme in return for tax relief.
- Instant access
- Accounts where you don't lose interest even though you withdraw
money without giving the bank notice. The One account gives you instant access to your funds. All you have to do is
write a cheque, arrange a transfer or use your Switch or VISA cards.
- Insurable Interest
- A principle of insurance that states that someone may only take out
insurance if they stand to suffer a financial loss from an event covered by a policy.
- An agreement under which individuals, businesses, and other
organisations, in exchange for payment of a sum of money (a premium), are guaranteed indemnity for losses resulting
from certain events or conditions specified in a contract (policy).
- Insurance Premium Tax
- UK tax imposed on most non-life insurance premiums.
- A person or organisation covered by an insurance policy.
- The party to the insurance contract who promises to pay losses or
benefits, usually an insurance company.
- A person or organisation that offers advice and arranges policies
for clients. Under UK regulations, intermediaries must be either (1) "Tied", whereby they represent only one company in
the case of life business or a limited number of companies for general business, or (2) "Independent", whereby there is
no limit on the number of companies with which they can deal.
- Interest only method
- One of two ways used to pay off your mortgage, the other being the
Repayment method. Your monthly payments are solely used to pay off the interest you owe on your borrowings. This means,
you'll have to make provision to pay off the amount you actually borrowed at the end of your mortgage term, for example
using an ISA, a pension or an endowment.
- Internal Revenue Code
- The laws governing taxation in the United States, administered by
the Internal Revenue Service.
- Internal Revenue Service
- (IRS) The federal agency in the United States with responsibility
for regulating public charities and foundations, as part of its authority under the Internal Revenue Code.
- Dying without having made a Will. If a UK resident dies intestate
there are rules as to the distribution of the estate, which have to be followed whether or not they coincide with what
the deceased person would have wished.
- Investment Income
- The portion of a company's or an individual's income which is
derived from its investments, including interest and dividends on stocks and bonds.
- Investment Management Regulatory Organisation
- A regulatory body which governs the way investors money is handled
- Investment Trust
- Unlike a unit trust, which is 'open-ended', an investment trust is
effectively a company which, for a management fee, invests the pooled money of small investors in securities for stated
investment objectives. An investment trust is 'closed-end' in that it has a fixed number of shares that are traded like
stock, often on many different exchanges. Visit the Flemings website for more details.
- Insurance Ombudsman Bureau See: Ombudsman.
- Irrevocable Trust
- A trust arrangement that cannot be revoked by the creator.
- Stands for Individual Savings Accounts which the Government
introduced on 6th April 1999. ISAs replaced PEPs and TESSAs - no further investments are allowed into the latter,
though you can retain existing investments within them tax-free. ISAs offer similar tax-free benefits to PEPs but you
can hold a wider range of investments.
© APT Finance. All Rights Reserved
| Legal Disclaimer |