Glossary
Glossary
A
Accumulation Value
A term used in Universal Life policies to describe the total of all premiums paid and interest credited to the account before deductions for any expenses, loans or surrenders.
Actuary
Person who applies mathematical, analytical, and business skills to help solve a variety of financial and social problems. Actuaries develop models to estimate the financial impact of future events. Actuaries put a price tag on future risks.
Adjusted Cost Basis (ACB)
The basis on which the Canada Customs and Revenue Agency determines accrued income and policy gains (e.g., premium deposits will increase the ACB; loans and partial withdrawals will decrease it).
Advisor
A licensed independent sales representative. Advisors may be described by various specified titles, depending on the type of products they are licensed to sell and dictated by the laws of the province where they work.
'Alternate Residual' Definition of Disability
A definition of disability that's applied for individual disability insurance plans if you're unable to perform some important duties in your job, or can only work half your regular hours.
Any Occupation
Some individual disability insurance plans use this strict definition of disability, which requires that you be unable to work at ANY job (generally for which you are qualified).
Group plans can also include an 'any occupation' disability clause under which benefits are paid if you're unable to perform the duties of any occupation for which you are or become reasonably qualified for by virtue of training, education, and experience.
Annuitant
The annuitant is an individual on whose life the annuity and guaranteed death benefit are based. The annuitant can be the policyowner or an individual you so designate. If the plan is registered, the policyowner and the annuitant must be the same individual.
If the plan is registered, you can name your spouse as a successor annuitant; if this option is chosen, any guaranteed benefits will be based on the life of the surviving spouse.
Annuities
Annuities provide the assurance of a guaranteed retirement income for a specified period. You can depend on receiving a regular income at the same time each year, and there are no more investment decisions to be made.
Annuity Benefit (Maturity Guarantee)
For investment plans offered through life insurance companies, an annuity benefit is the value of your investments held within the plan on your annuity date and subject to various guarantees provided within your contract.
Annuity Date (Maturity Date)
The date your plan matures, or the date on which your annuity or maturity benefit applies for investment plans offered through life insurance companies.
Assumed Total Disability
You're considered totally disabled, regardless of ability to work or the medical care required, if you suffer the total and permanent loss of sight, hearing, speech, hands or feet.
Attained Age
The age an insured has reached on a given date.
Averages & Indices
Statistical tools that measure the state of the stock market or the economy, based on the performance of stocks or other meaningful components e.g., the Dow Jones Industrial Average, the Consumer Price Index, etc.
B
Back End Load
Same as Deferred Sales Charge
Beneficiary
A person entitled to receive a gift or benefit under a Will, Insurance Policy, RRSP, RESP, Trust Deed or other similar document.
Beta
A measure of how sensitive a security or portfolio is to the return of the market. For example, a beta of 1.1 means that a portfolio is expected to increase (or decrease) by 1.1% when the market increases by 1%. Similarly, a beta of 0.9 indicates that a portfolio is expected to increase (or decrease) 9/10ths of 1% when the market increases (or decreases) by 1%.
Buy/Sell Agreement
A legal contract with your fellow shareholders or partners to buy out the business interest at death, disability or retirement.
C
Canada Savings Bond
A bond issued each year by the federal government. These bonds can be cashed in at any time for their full face value.
Cash Surrender Value
The amount of cash a person may obtain by voluntarily surrendering a life insurance policy. This terminates all insurance benefits.
Capital Gains
A profit from the sale of investments or property. Capital Gains can be 'realized' (the sale took place) or 'unrealized' (growth on paper only – no sale took place). Taxes are generally due on realized capital gains.
Cash Value – Investments
The amount that's available for redemption and sometimes referred to as the 'redemption value'. It's equal to the accumulated value (or market value) of your investments less any applicable plan expenses or deferred sales charges.
Cash Value – Life Insurance
The working capital, less any applicable market value adjustment, outstanding premiums, surrender charges and any outstanding loan balance.
Certificate
A document providing evidence of ownership of a security such as a stock or bond.
Codicil
A document signed by the testator and two witnesses that changes the original terms of the will.
Common Disaster
A situation in which the insured and the beneficiary appear to die simultaneously with no clear evidence of who died first.
Common Disaster Clause
A clause sometimes added to a Life Insurance policy or a will that provides a means for the insurer to distribute the proceeds of the policy in the event of a common disaster.
CompCorp
A consumer protection plan for insurance companies. Retirement plans invested in GICs are protected up to $ 60,000.00 per person.
Consumer Price Index
An index that tracks the change in price over time of a set list of consumer goods.
Contingent Beneficiary
A person(s) named to receive policy benefits if the primary beneficiary is deceased at the time the benefits become payable
Contingent Life
Similar to joint-first to-die coverage, but with different insurance amounts on each life.
Coverage Rider
Additional insurance coverage that you can purchase in conjunction with the insurance on the main life or lives (e.g., term rider, children 's coverage rider, disability waiver rider).
Creditor Protection
Provided certain members of a family class are named as beneficiary or that a beneficiary designation is made irrevocable, some policies may be protected from claims of the policyowner's creditors.
Critical Illness
This is a strict list of serious medical conditions that are deemed debilitating and are covered by critical illness insurance. Our basic list includes cancer, heart attack, stroke, and coronary artery by-pass surgery, which will be clearly defined in the policy for benefit purposes.
Critical Illness Insurance
An individual insurance plan specifically to help offset the unexpected costs that can arise if you're diagnosed with a critical illness. Basic coverage includes cancer, heart attack, stroke, and coronary artery by-pass surgery, which will be clearly defined in the policy for benefit purposes. You can opt for enhanced coverag
e that includes approximately 20 impairments.
D
Death Benefit
The amount stated in a policy contract as payable upon the death of the person whose life is being insured
Debenture
A bond unsecured by any pledge of property. It is supported by the general credit of the issuing corporation.
Debt
An obligation to repay a sum of principal, plus interest. In corporate terms, debt often refers to bonds or similar securities.
Deferral
A form of tax sheltering that results from an investment that offers deductions during the investor's high-income years, and/or postpones capital gains or other income until after retirement or during another period when the income level is expected to change.
Deferred Sales Charge (DSC)
Often referred to as a redemption charge, this is a fee that is applied to withdrawals (redemptions) that occur during a specified period.
Deferred Profit Sharing Plan (DPSP)
A plan that allows an employer to set aside a portion of company profits for the future benefit of employees.
Defined Contribution (DC) Plan
A pension plan that provides retirement benefits according to the performance of investments made with contributions to the plan.
Deposit
Deposits are defined as the amount that is available for investment or, in other words, to purchase units in a fund. If the initial sales charge option is chosen, the deposit is equal to the amount received for investment less the amount of the initial sales charge paid to the financial advisor. If the deferred sales charge option is chosen, the deposit is equal to the total amount received for investment.
Distribution
A payout of income and net realized capital gains earned and declared on investments held within segregated funds. On a distribution day, any income or net realized capital gains earned and declared by a given fund is distributed to policyowners investing in that fund in the form of additional units.
Disability
'Disability' is specifically defined in each insurance policy or group contract. In reference to individual life insurance, depending upon the benefit, disability refers to total disability, occupational disability, or a critical condition.
Disability Benefit
The benefit payable under a Disability Income Policy.
Disability Pension
A pension paid to a disabled worker prior to the time of normal retirement. (LI)
Dollar Cost Averaging
Systematically investing a fixed amount of money in a specific security at regular intervals over a period of time, thereby reducing the average cost paid per unit.
Double Indemnity
Payment of twice the basic benefit in the event of loss resulting from specified causes or under specified circumstances. For example, a Life Insurance contract may provide for twice the basic benefit if death is due to accident.
E
Earned Income
For tax purposes, earned income is generally the money made by an individual from employment. It also includes some taxable benefits. Earned income is used as the basis for calculating RRSP maximum contribution limits.
Elimination Period
This is the number of (consecutive) days of disability that must elapse before benefits begin to accrue.
Some individual disability plans allow separate periods of disability to be accumulated for purposes of satisfying the elimination period.
Equities
The ownership interests in companies, generally represented by share certificates or other evidence.
Executor
The person named in the will to take charge of disposing or distributing the estate according to the directions left by the testator. One of the primary duties of the executor is to apply, when necessary, for a Grant of Probate to allow for the transfer of assets from the estate to the beneficiaries.
F
Face Value
The principal amount, or value at maturity, of a debt obligation. Also known as the par value or denomination.
Fair Market Value
The price a willing buyer would pay a willing seller if neither were under any compulsion to buy or sell. The standard at which property is valued for a deemed disposition.
Fiduciary
An individual or institution occupying a position of trust. An executor, administrator or trustee.
Financial Advisor
An advisor who is independent of any financial services company can provide objective and independent opinions to help you choose the options that are best suited to your particular circumstance.
Flexible Premiums
A premium payment in excess of the set premiums for the individual life insurance policy. These can be made regardless of the payment frequency of the policy.
Front-End Load
A sales charge levied on the purchase of mutual fund units.
Fund Transfer
The process by which you make a change in your fund allocation within an individual investment plan.
Futures
A contract to purchase (or sell) a specified commodity or index during a specified future month at a price agreed upon when the contract is negotiated.
G
Gross Earned Income
Gross earned income is defined as income that depends on the ability to work; salary, bonus, commissions and fees – any amount that you earn before taxes and deductions, but after expenses.
Guaranteed Interest Account (GIA)
We offer guaranteed interest rate accounts that are similar to GICs offered by banks.
Guaranteed Investment Certificates (GIC)
GICs provide a high level of security. They offer interest rates for a range of investment terms, in which the rate of return and the maturity date of the investment are guaranteed.
Guaranteed Death Benefit
An amount that is guaranteed upon the death of the annuitant.
Guaranteed Maturity Benefit
An amount that is guaranteed on a plan's annuity date (or maturity date).
Guardian
A parent living with and supporting his or her child, or is a person appointed by the Court to be the Guardian, or is a person appointed in the Will of the child's parent or legal guardian to be the Guardian of that child. Guardianship ceases once the child reaches the age of majority.
H
Home Buyers Plan (HBP)
A program set up by Revenue Canada, under which you can, generally, withdraw up to $20,000.00 from your RRSP to buy or build a qualifying home. These withdrawals are non-taxable, but must be repaid within a period of no more than 15 years.
I
Income Funds
Mutual funds that invest primarily in fixed-income securities such as bonds, mortgages and preferred shares. Their primary objective is to produce income for investors, while preserving capital.
Index Fund
A mutual fund that matches its portfolio to that of a specific financial market index, with the objective of duplicating the general performance of the market in which it invests.
Income Replacement
Your individual disability insurance plan pays you a regular income each month during your disability. Your basic coverage and premiums are linked to your occupation, income and other sources of insurance at the time of application.
For group insurance, benefits are based on the premiums pa
id as well as on your salary and other income benefits payable. Please note, under most group insurance plans, other income such as Canada Pension Plan, are offset from the disability benefit payment.
Inflation
A term used to describe rising prices of goods and services within an economy.
Initial Sales Charge
When an initial sales charge option is chosen, a sales charge is deducted from the amount received for investment and paid to the financial advisor with the remaining amount invested in the chosen fund options.
Irrevocable Beneficiary
A beneficiary that cannot be changed without his consent.
Insurance Amount
For individual life insurance, 'insurance amount' means the dollar value payable at the death of the life insured. Policy loans and death benefit options may impact the total benefit to the beneficiary.
Intestate
A person who dies without leaving a Will.
Investment Income Tax (IIT)
A charge levied by the Federal Government on the funds in insurance policies.
Investment Management Fee
The fees you pay to invest in a segregated fund in addition to the operating expenses of the fund.
Investment Mix
The combination of investment options selected by you to grow your policy values.
Investment Only Pension Plan (IOPP)
A pension plan whereby we provide investment management services with no member level reporting.
J
Joint-First-To-Die
The case in which two lives are covered, with the insurance amount paid when the first death occurs.
Joint-Last-To-Die
The instance in which two lives are covered, with the insurance amount paid when the last death occurs.
K
L
Letter of Intent
An agreement whereby an investor agrees to make a series of purchases of mutual fund units.
Leverage
The financial advantage of an investment that controls property of greater value than the cash invested. Leverage is usually achieved through the use of borrowed money.
Leveraging
Borrowing against collateral for the purpose of investment, with the expectation that investment growth will exceed cost of borrowing. These concepts are not for use by everyone and require professional expertise and advice.
Liabilities
All debts or amounts owing by a company in the form of accounts payable, loans, mortgages and long-term debts.
Life Annuity
An annuity under which payments are guaranteed for the life of the annuitant.
Life Expectancy Adjusted Withdrawal Plan
A plan through which a mutual fund investor's holdings are fully depleted while providing maximum periodic income over the investor's lifetime.
Liquidity
Refers to the ease with which an investment may be converted to cash at a
LIF
Similar to a RRIF a LIF or life income fund is an extension of an RRSP and provides you with greater flexibility to vary your income and control over your investment decisions for your retirement income. It can be created at any time, but only with money transferred from a LIRA, another LIF, or directly from an employer-sponsored pension plan. No other source of fund is allowed. There is a prescribed maximum payment that prevents you from collapsing the plan. This ensures the funds are used to provide a pension income throughout your life as was intended by the pension plan from which the funds originated. By December 31 of the year you turn 80, the LIF must be converted to an annuity that meets the requirements of the applicable pension legislation. Not all provinces or jurisdictions allow LIFs.
LIRA
If deposits originate from a pension plan, they continue to be locked-in under a locked-in retirement account (LIRA) or locked-in RRSP. 'Locked-in' refers to the restrictions and limitations that are imposed by the applicable provincial pension legislation.
Locked-in Registered Income Fund (LRIF)
While similar to a LIF, a locked-in registered income fund's (LRIF) regulation differs in that you aren't required to purchase an annuity at age 80. Minimum payments are calculated differently. The maximum annual payment is equal to the greater of investment earnings in the previous year, the accumulated value less net amount transferred into the plan, or the RRIF minimum payment. Currently, LRIFs are only available if you have pension plans registered in Saskatchewan, Manitoba, and Alberta.
Locked-in Plans
If deposits originate from a pension plan, they continue to be locked-in under this plan. 'Locked-in' refers to the restrictions and limitations that are imposed by the applicable provincial pension legislation.
M
Marginal Tax Rate
The rate of tax on the last dollar of taxable income.
Market Index
A vehicle used to denote trends in securities markets. The most popular in Canada is the Toronto Stock Exchange 300 Composite Index (TSE 300).
Market Price
In the case of a security, market price is usually considered the last reported price at which the stock or bond is sold.
Maturity
The date at which a loan or bond or debenture comes due and must be redeemed or paid off.
Money Market
A sector of the capital market where short-term obligations such as Treasury bills, commercial paper and bankers' acceptances are bought and sold.
Management Expense Ratio
A ratio that illustrates fund expenses to fund assets. It's calculated by dividing the total of the Investment management fee and the operating expenses paid by the segregated fund over a financial year (as stated in the financial report) by the average net asset value of the fund over that same financial year.
Market Value Adjustment (MVA)
A charge against a fixed interest or income option upon surrender, withdrawal or transfer to another investment option.
Money Market (Investment)
A type of Fund that invests primarily in treasury bills and other low-risk short-term investments.
Money Purchase Plan (MPP)
See Defined Contribution Plan.
Mutual Fund
An investment entity that pools shareholder or unit holder funds and invests in various securities. The units or shares are redeemable by the fund on demand by the investor. The value of the underlying assets of the fund influences the current price of units.
N
Nasdaq 100
Return is linked to Nasdaq 100 Composite Index, including several high-tech companies such as Cisco Systems, Intel, Microsoft, and Qualcomm.
Net Assets
The net assets of a fund are determined by calculating the market value of all of its assets (its investments) and subtracting its liabilities (such as the fund's operating expenses).
Nikkei 225
Includes 225 of the largest and most liquid companies listed on the Tokyo Stock Exchange.
No-Load Fund
A mutual fund that does not charge a fee for buying or selling its shares.
'Non-Occupational' Definition of Disability
For individual disability insurance, the definition of total disability is related to the inability to perform the client's regular occupation. If you're unemployed, on leave or sabbatical when an injury or sickness occurs, a total disability claim can stil
l be payable. Under this provision, your disability will be determined based on your ability to perform the regular substantial activities being performed prior to the onset of your disability. Furthermore, if you were scheduled to return to work (e.g., sabbatical, maternity leave), the definition of disability would change to the regular one on the date when you were scheduled to return.
Under group benefit plans, 'non-occupational disability' means a disability not resulting from an injury or illness caused by your employment (as these would normally be covered by Workers' Compensation).
O
Options
A right to buy or sell specific securities at a specified price within a specified time.
Open-End Fund
An open-end mutual fund continuously issues and redeems units, so the number of units outstanding varies from day to day. Most mutual funds are open-ended.
Own Occupation
Under an individual disability policy, an 'own occupation' definition means that you will be considered totally disabled if you cannot perform the duties of your usual job, regardless of whether or not you're working at another job. This additional level of protection is typically of interest to professionals, who may wish to return to work in a different field if they were permanently disabled, and want to maintain the income level they enjoyed before their disability.
P
Partial
Some individual disability policies contain a 'partial disability' feature, which provides benefits if you're unable, due to injury or sickness, to perform one or more of the important duties of your regular occupation OR are unable to work for more than half the usual amount of time. You must be under regular care and attendance of a physician.
A group benefit plan may also include a clause that provides a 'partial disability' benefit if you're only able to work in a reduced capacity. Please see your group contract for details (if such a clause is included).
Partial Withdrawal
An amount withdrawn from the cash values of an investment policy or certain life insurance policies.
Pension Plan
A pension plan is a promise by a pension sponsor to a plan member to provide a pension upon retirement.
Permanent Life Insurance
Permanent insurance solutions allow you to insure against the unexpected while increasing the value of your investment over time. Advantages include tax-advantaged investment growth and tax-free insurance benefits.
Physician
Under an individual insurance policy, 'physician' means a medical doctor, licensed and practicing medicine in Canada or the United States, or in another approved jurisdiction. The physician must be a person other than the owner, the person insured or a relative or business associate of either.
Plan Member
A plan member is a person who participates in and is covered under a group benefits plan, such as an employee of an organization or a member of an association or a union group.
Plan Sponsor
A plan sponsor is an employer, association, labour union or other group offering a benefit plan to its members.
Policyowner
The policyowner is the individual who is the legal owner of the policy. The policyowner can be a single individual. For non-registered policies, a policyowner can also be a group of individuals, subject to any applicable legislation. The policyowner can be no younger than the age of majority. All policy reporting will be sent to the policy owner.
Policy Lapse
If the conditions for keeping the policy in-force have not been met (for instance, there isn't a cash value and premiums remain unpaid after the grace period) then the policy will lapse, and coverage will end.
Policy Loan
A loan made on the security of the cash value of your policy.
Policy Statement
A report listing current conditions and transactions of the latest reporting period.
Policy Surrender
Request from the policyowner to cease coverage and return the cash value. The policyowner surrenders the contract to the insurance company.
Portfolio
All the securities, which an investment company or an individual investor owns.
Power of Attorney
A document authorizing a person or corporation to handle the financial and legal affairs of another person.
Premium
The set amount you pay in order to be insured by your individual life, disability or critical illness insurance policy, association plan benefits, or that a plan sponsor (and/or plan members) must pay to maintain a group benefit plan.
Premium Tax
Tax levied by the provincial government on premiums paid.
Present value
The current worth of an amount to be received in the future. In the case of an annuity, present value is the current worth of a series of equal payments to be made in the future.
Principal
The original amount of money invested.
Public Guardian and Trustee
The Official Administrator for British Columbia. The Public Guardian and Trustee is empowered to protect the estates and financial interests of minors and mentally disordered or handicapped persons and to administer the estates of deceased persons where no other person is competent to act.
Q
R
Rated
Coverage issued at a higher rate than standard because of impairment of the insured.
Rate of return
The cumulative rate of interest an investor achieves on their investment.
RRIF
When you convert your RRSP to a RRIF or Registered Retirement Income Fund, you continue to enjoy the benefits that you had with your RRSP including tax-sheltered growth, investment control and flexibility. RRIFs bring other benefits: they allow you to vary your income stream from year to year (subject to a minimum amount set by Canada Customs and Revenue Agency) and to make additional withdrawals when needed.
Registered Pension Plan (RPP)
For a pension plan to have tax exempt status, it must be registered under the Income Tax Act and under either the federal Pension Benefits Standards Act or under a provincial Pension Benefits Act. Contributions are tax deductible by an employee and employer within the federal taxation limits.
RRSP
Any Canadian resident who is under age 69 with qualified earned income can contribute to a Registered Retirement Savings Plan (RRSP). The amount you can contribute depends on the income you earned in the previous year and limits established by Canada Customs and Revenue Agency. Benefits include tax-sheltered growth, investment control and flexibility.
Renewable Term
Term Insurance that may be renewed for another term without evidence of insurability.
Regular Care of a Physician
To be considered totally or residually disabled, you must be under the care of a physician that is appropriate in nature and frequency for the condition.
Regular Occupation
Some individual disability contracts use a 'regular occupation' definition, which means that as long as you're not working because you can't do your regular job, you're considered disabled. However, you're no longer considered totally disabled if you go to work at a new occupation.
Recurrent Disability
If your disability recurs within a specified time period from causes that are the same as or related to t
he cause of your prior disability, the subsequent disability is considered a continuation of the first for the purposes of individual disability insurance plans.
Redeemable
Preferred shares or bonds that giver the issuing corporation an option to repurchase securities at a stated price. These are also known as callable securities.
Registered Education Savings Plan (RESP)
A plan that enables a contributor, on a tax deferral basis, to accumulate assets on behalf of a beneficiary to pay for a post secondary education.
Registered Retirement Income Fund (RRIF)
A maturity option available for RRSP assets to provide a stream of income at retirement.
Registered Retirement Savings Plan (RRSP)
A retirement savings plan to hold amounts deducted from taxable income, within certain limits, in a tax deferred state. There are various investment options and a tax deferral on investment income and gains. Available to individuals to and including 69 years of age, but must be collapsed by the end of the year in which the holder turns 69 years of age.
Residual Disability
Some individual disability policies include a residual disability definition, which typically means you're not totally disabled, but due to sickness or injury, have an income loss of 20% or more. Regular care from a physician is required.
Revocable Beneficiary
The beneficiary in a Life Insurance policy in which the owner reserves the right to revoke or change the beneficiary.
S
S&P 500 Index
Standard & Poor's measure of 500 widely held stocks listed on the New York Stock Exchange, American Stock Exchange and the over-the-counter market.
Segregated Fund
An investment or co-mingled fund offered by a Canadian life insurance company that invests in a portfolio of securities on behalf of several investors. It is held separate from the insurer's general assets and provides various insurance benefits.
Shares
A document signifying part ownership in a company. The terms "share" and "stock" are often used interchangeably.
Shareholders' Equity
The amount of a corporation's assets belonging to its shareholders (both common and preferred) after allowance for any prior claim.
Spousal RRSP
A member of an RRSP may contribute all or part of their allowable RRSP contributions to an RRSP on behalf of their spouse. The contributor spouse gets the income tax deduction. The other spouse actually owns the funds.
Spread
The difference between the rates at which money is deposited in a financial institution and the higher rates at which the money is lent out. Also, the difference between the bid and ask price for a security.
Stock Options
Rights to purchase a corporation's stock at a specified price.
Strip Bonds
The capital portion of a bond from which the coupons have been stripped. The holder of the strip bond is entitled to its par value at maturity, but not the annual interest payments.
Surrender
To give up a Whole Life policy. The insurer pays the insured the cash value, which the policy has built up if it is surrendered.
Survival Period
For a critical illness insurance policy, this is the number of days you must survive following the diagnosis of a covered impairment in order for the benefit to be payable. This period is normally 30 days following diagnosis in the definition of the corresponding covered impairment.
Synthetic Securities (Derivatives)
A security that derives its value in whole, or in part, from an underlying security.
Systematic Withdrawal Plan
If elected, you will receive equal payout amounts at an interval you specify.
T
TSE 300 Index
A capitalization-weighted index of 300 stocks listed on the Toronto Stock Exchange. Larger companies have a greater influence on index returns than smaller companies.
Tax-Exempt
Investment income within an exempt individual life insurance policy will grow tax-sheltered, maximizing the net worth of the capital invested. Death benefit is paid to the beneficiary tax-free.
Term Insurance
Provides life insurance for a set period of time.
Total Accumulated Value (Market Value)
The total accumulated value (or market value) of your plan is determined as the sum of the accumulated unit value credited to your plan in each segregated fund.
Total Disability
Depending on the specific individual disability insurance policy, the definition for total disability may be based on the regular occupation, own occupation or any occupation, or a combination of these.
For group benefit plans, 'total disability' normally means that solely because of an illness or accidental injury, you're unable to perform the essential duties of your own occupation (type of work, not just your own job) for a certain period of time (often 24 months), and from then on unable to work at any occupation for which you are or may reasonably become, fitted by education, training or experience.
Trade
A securities transaction.
Treasury Bill (T-bill)
Short-term government debt. Treasury bills bear no interest, but are sold at a discount. The difference between the discount price and par value is the return to be received by the investor.
Trust
An instrument placing ownership of property in the name of one person, called a trustee, to be held by the trustee for the use and benefit of some other person.
Transfer
Moving a dollar amount to or from one or more of the investment options within an applicable life or investment policy.
U
Underwriter
An investment firm that purchases a security directly from its issuer for resale to other investment firms or the public or sells for such issuer to the public.
Underlying Fund
A fund is said to be investing in underlying funds when it invests all or a portion of its assets in units of an existing mutual or segregated fund.
Unit Value
The unit value is used to measure the market value of one unit (or share) of a segregated fund.
Universal Life Insurance
Allows you to tailor an insurance policy by choosing features including premium levels, investment risk exposure for the policy's savings component, and insurance coverage options.
V
Valuation Day
The day on which a fund's assets are valued and for which fund income or expenses are accounted.
Vesting
In pension terms, the right of an employee to all or part of the employer's contributions, whether in the form of cash or as a deferred pension.
Vesting Period
Vesting is the amount of time you must be a member of a pension plan before earning the right to the employer portion of the contributions in the pension plan.
W
Waiver of Premium
A provision of a Life Insurance policy, which continues the coverage without further premium payments if the insured becomes totally disabled
War Clause
A provision excluding liability of an insurer if a loss is caused by war.
Warrant
Certificates allowing the holder the opportunity to buy shares in a company at a stated price over a specifie
d period. Warrants are usually issued in conjunction with a new issue of bonds, preferred shares or common shares.
Withholding Tax
Tax required by Canada Customs and Revenue Agency withheld on the payment of interest or dividends, or on income from a registered plan or tax-exempt insurance policy, in order to reduce the amount of income tax owed at the end of the tax year.
X
Y
YMPE
Yearly Maximum Pensionable Earnings is an amount established each year under the Canada Pension Plan (CPP). It determines the earnings on which contributions are made and benefits calculated under the CPP and is adjusted annually to approximate the average industrial wage in Canada.
Yield
Annual rate of return received on investments, usually expressed as a percentage of the market price of the security.
Yield to Maturity
The annual rate of return an investor would receive if a bond were held until maturity.
Z