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| A sales charge deducted from an investment for exiting early, or before the sales charge ceases to exist. Mutual fund class B
and C shares often carry a deferred sales charge. Also called back end load, CDSC or contingent deferred sales charge. |
| A procedure for making the effective date of a policy earlier than the application date. Backdating is often used to make the
age of the consumer at policy issue lower than it actually was in order to get a lower premium. |
| Measurement used to quote bonds. One basis point is equal to 0.01%, or one one-hundredth of one percent. 100 basis points is
equal to 1%, whereas 50 basis points would equal one half percent, or 0.50%. |
| A unit or group of securities. Baskets can be arranged according to industry/sector, market capitalization, and security
type. |
| A prolonged period of declining prices in stocks, bonds, or commodities. A bear market in stocks is precipitated by negative
economic activity or a series of events that have a negative influence upon stocks. A bear market in bonds is caused by rising interest rates. |
| A standard index used for measuring the performance of an investment. The goal of most money managers and investors is to
outperform their respective benchmark. |
| Commonly refers to stock or bond indexes used to measure market performance and to compare the relative performance of an
investment portfolio. Investing directly into an index is not possible. In addition, these benchmark indexes do not have transaction costs and other
expenses as does an investment portfolio. |
| Generally, the person(s) who receive(s) money upon the death of the annuity's contract owner or annuitant. The contract owner
decides who the beneficiary will be. |
| A period of time typically one to three years during which disability income or long term care benefits are paid after the
waiting period is satisfied. When the benefit period ends, the insured must generally then satisfy a new waiting period in order to establish a new
benefit period. |
| The sum of money specified in a life insurance contract to be paid to the beneficiary when a loss occurs. |
| A volatility measurement of a fund or stock versus the Standard & Poor's 500 Stock Index. A fund or stock with a higher beta
than the Standard & Poor's 500 will rise or fall greater. To the contrary, a stock or a fund with a low beta will rise or fall less. |
| A written or oral contract issued temporarily to place insurance in force when it is not possible to issue a new policy or
endorse the existing policy immediately. A binder is subject to the premium and all the terms of the policy to be issued. |
| A receipt given for a premium payment accompanying the application for insurance. If the policy is approved, this binds the
company to make the policy effective from the date of the receipt. |
| A general term used to describe products structured with both Whole Life and Term components. |
| A debt instrument issued by corporations and governments to raise capital. Interest on the outstanding debt is paid to
bondholders at specific intervals, with the principal amount of the loan paid on the bond maturity date. |
| An IOU or promissory note issued by companies or governments and their agencies. Bonds provide income and some growth
potential but not as much growth potential or historical price fluctuations as stocks. The amount of interest paid by a bond varies depending on its
credit risk (the risk the issuer will repay the loan) and on its maturity risk. High quality, short-term bonds generally pay the lowest yields, and low
quality, long-term bonds pay higher yields. |
| A licensed person or organization paid by you to look for insurance on your behalf. |
| An individual or firm that acts as principal in a securities transaction. |
| A prolonged period of increasing prices in stocks, bonds, or commodities. |
| A life insurance policy of minimal face amount intended to provide just enough insurance to cover the burial and funeral
expenses. |
| Life insurance purchased by a business enterprise on the life of a member of the firm. It is often bought by partnerships to
protect the surviving partners against loss caused by the death of a partner, or by a corporation to reimburse it for loss caused by the death of a key
employee. |
| A market strategy that involves purchasing and owning an investment for a long time, often years. This permits investors to
receive favorable capital gains treatment on any potential profits. Buy and hold also helps investors to focus less on the short-term market performance
or fluctuations of their investments. |
| An agreement made by the owners of a business to purchase the share of a disabled or deceased owner. The value of each
owner's share of the business and the exact terms of the buying and selling process are established before death or the onset of a disability. |
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