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Financial Terms | |
Captive Agent |
Information about financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.
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Definition of Captive AgentCaptive AgentA licensed insurance agent who sells insurance for only one company.
Related Terms:AgentThe decision-maker in a principal-agent relationship. AgentOne who represents Canada Life when providing services to clients Principal-agent relationshipA situation that can be modeled as one person, an agent, who acts on the behalf Transfer agentndividual or institution appointed by a company to look after the transfer of securities. Accidental Dismemberment: (Credit Insurance)Provides additional financial security should an insured person be dismembered or lose the use of a limb as the result of an accident. All or noneRequirement that nOne of an order be executed unless all of it can be executed at the specified price. All-or-none underwritingAn arrangement whereby a security issue is canceled if the underwriter is unable ![]() Amortization (Credit Insurance)Refers to the reduction of debt by regular payments of interest and principal in order to pay off a loan by maturity. Asset allocation decisionThe decision regarding how an institution's funds should be distributed among the At-the-moneyAn option is at-the-mOney if the strike price of the option is equal to the market price of the Average lifeAlso referred to as the weighted-average Life (WAL). The average number of years that each Beneficiary (Credit Insurance)The person or party designated to receive proceeds entitled by a benefit. Payment of a benefit is triggered by an event. In the case of credit insurance, the beneficiary will always be the creditor. Blue-chip companyLarge and creditworthy company. Borrower (Credit Insurance)A consumer who borrows mOney from a lender. Call money rateAlso called the broker loan rate , the interest rate that banks charge brokers to finance Canada Pension Plan (CPP)A plan that provides retirement and long term disability income benefits to residents of Canadian provinces (excluding Quebec). ![]() Canada Savings BondsA bond issued each year by the federal government. These bonds can be cashed in at any time for their full face value. Canadian Deposit Insurance CorporationBetter known as CDIC, this is an organization which insures qualifying deposits and GICs at savings institutions, mainly banks and trust companys, which belong to the CDIC for amounts up to $60,000 and for terms of up to five years. Many types of deposits are not insured, such as mortgage-backed deposits, annuities of duration of more than five years, and mutual funds. Canadian Life and Health Insurance Association (CLHIA)An association of most of the Life and health insurance companies in Canada that conducts research and compiles information about the Life and health insurance industry in Canada. capital budgeting decisiondecision as to which real assets the firm should acquire. Child Insurance Rider (CIR)insurance or insurability provided on current or future children of insured. Co-insuranceIn medical insurance, the insured person and the insurer sometimes share the cost of services under a policy in a specified ratio, for example 80% by the insurer and 20% by the insured. By this means, the cost of coverage to the insured is reduced. Coinsurance effectRefers to the fact that the merger of two firms decreases the probability of default on Commercial Business Loan (Credit Insurance)An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes. Company AcquisitionsAssets acquired to create mOney. May include plant, machinery and equipment, shares of another company etc. company cost of capitalExpected rate of return demanded by investors in a company, determined by the average risk of the company’s assets and operations. Company-specific riskRelated: Unsystematic risk Companyspecific RiskSee asset-specific risk ComponentRaw materials or subassemblies used to make either finished goods Concentration servicesMovement of cash from different lockbox locations into a single concentration Cost company arrangementArrangement whereby the shareholders of a project receive output free of Cost of InsuranceThe cost of insuring a particular individual under the policy. It is based on the amount of coverage, as well as the underwriting class, age, sex and tobacco consumption of that individual. Creditor (Credit Insurance)A lender or lending institution that offers financing and loans to a borrower, for the purpose of acquiring a commodity. Critical Illness InsuranceCoverage that provides a lump-sum payment should you be diagnosed with a critical illness and survive a pre-determined period of time. There are no restrictions on how you use your benefit. Critical Illness Insurance (Credit Insurance)Coverage that provides a lump-sum payment should you become seriously ill with a specified illness. The payment is made to your creditors to pay off your debt owing. Dead Peasants InsuranceAlso known as "Dead Janitors insurance", this is the practice, where allowed, in several U.S. states, of numerous well known large American Corporations taking out corporate owned Life insurance policies on millions of their regular employees, often without the knowledge or consent of those employees. Corporations profiting from the deaths of their employees [and sometimes ex-employees] have attracted adverse publicity because ultimate death benefits are seldom, even partially passed down to surviving families. Debt (Credit Insurance)MOney, goods or services that someOne is obligated to pay someOne else in accordance with an expressed or implied agreement. Debt may or may not be secured. decision makingthe process of choosing among the alternative Decision treeMethod of representing alternative sequential decisions and the possible outcomes from these decisions. decision treeDiagram of sequential decisions and possible outcomes. decision variablean unknown item for which a linear programming Deferred nominal life annuityA monthly fixed-dollar payment beginning at retirement age. It is nominal Depository Trust Company (DTC)DTC is a user-owned securities depository which accepts deposits of Disability Insuranceinsurance that pays you an ongoing income if you become disabled and are unable to pursue employment or business activities. There are limits to how much you can receive based on your pre-disability earnings. Rates will vary based on occupational duties and length of time in a particular industry. This kind of coverage has a waiting period before you can begin collecting benefits, usually 30, 60 or 90 days. The benefit paying period also varies from 2 years to age 65. A short waiting period will cost more that a longer waiting period. As well, a long benefit paying period will cost more than a short benefit paying period. Disability Insurance (Credit Insurance)Group insurance designed to cover monthly obligations due to a borrower being unable to work due to sickness or injury. Dow Jones industrial averageThis is the best known U.S.index of stocks. It contains 30 stocks that trade on Dow Jones Industrial AverageIndex of the investment performance of a portfolio of 30 “blue-chip” stocks. economic components modelAbrams’ model for calculating DLOM based on the interaction of discounts from four economic compOnents. Economic lifeThe period over which a company expects to be able to use an asset. Equity-based insuranceLife insurance or annuity product in which the cash value and benefit level fluctuate according to the performance of an equity portfolio. Errors and Omissions Insuranceinsurance coverage purchased by the agent/broker which provides protection against loss incurred by a client because of some negligent act, error, oversight, or omission by the agent/broker. European Monetary System (EMS)An exchange arrangement formed in 1979 that involves the currencies Expected return-beta relationshipImplication of the CAPM that security risk premiums will be Export Credit InsuranceThe granting of insurance to cover the commercial and political risks of selling in foreign markets. Federal Deposit Insurance Corporation (FDIC)A federal institution that insures bank deposits. Federal Insurance Contributions Act of 1935 (FICA)A federal Act authorizing the government to collect Social Security and Medicare payroll taxes. Fiat MoneyFiat MOney is paper currency made legal tender by law or fiat. It is not backed by gold or silver and is not necessarily redeemable in coin. This practice has had widespread use for about the last 70 years. If governments produce too much of it, there is a loss of confidence. Even so, governments print it routinely when they need it. The value of fiat mOney is dependent upon the performance of the economy of the country which issued it. Canada's currency falls into this category. Finance Companycompany engaged in making loans to individuals or businesses. Unlike a bank, it does not receive deposits from the public. financing decisiona judgment made regarding the method financing decisiondecision as to how to raise the mOney to pay for investments in real assets. Financing decisionsdecisions concerning the liabilities and stockholders' equity side of the firm's balance Generally Accepted Accounting Principals (GAAP)A technical accounting term that encompasses the Group Life InsuranceThis is a very common form of Life insurance which is found in employee benefit plans and bank mortgage insurance. In employee benefit plans the form of this insurance is usually One year renewable term insurance. The cost of this coverage is based on the average age of everyOne in the group. Therefore a group of young people would have inexpensive rates and an older group would have more expensive rates. Guaranteed insurance contractA contract promising a stated nominal interest rate over some specific time Health Insurance Portability and Accountability Act of 1996 (HIPAA)A federal Act expanding upon many of the insurance reforms created by High-Powered MoneySee mOney base. Holding companyA corporation that owns enough voting stock in another firm to control management and Hot moneyMOney that moves across country borders in response to interest rate differences and that moves In-the-moneyA put option that has a strike price higher than the underlying futures price, or a call option Individual Insuranceinsurance that is offered to individuals rather than groups. Information servicesOrganizations that furnish investment and other types of information, such as Insurance ActIn Canada, a general statute that contains most of the insurance law of a common law province, and regulates the conduct of insurers and insurance agents within the province. Insurance CompanyA firm licensed to sell insurance to the public. Insurance Policy (Credit Insurance)A policy under which the insurance company promises to pay a benefit of the person who is insured. Insurance principleThe law of averages. The average outcome for many independent trials of an experiment Intercompany loanLoan made by One unit of a corporation to another unit of the same corporation. Intercompany transactionTransaction carried out between two units of the same corporation. Interest-only strip (IO)A security based solely on the interest payments form a pool of mortgages, Treasury International Monetary FundAn organization founded in 1944 to oversee exchange arrangements of International Monetary Fund (IMF)Organization originally established to manage the postwar fixed exchange rate system. International Monetary Market (IMM)A division of the CME established in 1972 for trading financial investment decisiona judgment about which assets will be Investment decisionsdecisions concerning the asset side of a firm's balance sheet, such as the decision to Job Loss Insurance (Credit Insurance)Coverage that can pay down your debt should you become involuntarily unemployed. The payment is made to your creditors to reduce your debt owing. Joint Policy LifeOne insurance policy that covers two lives, and generally provides for payment at the time of the first insured's death. It could also be structured to pay on second death basis for estate planning purposes. Law of one priceAn economic rule stating that a given security must have the same price regardless of the law of one priceTheory that prices of goods in all countries should be equal when translated to a common currency. Lease (Credit Insurance)Contract granting use of real estate, equipment or other fixed assets for a specified period of time in exchange for payment. The owner or a leased property is the lessor and the user the lessee. Lender (Credit Insurance)Individual or firm that extends mOney to a borrower with the expectation of being repaid, usually with interest. Lenders create debt in the form of loans. Lenders include financial institutions, leasing companies government lending agencies and automobile dealers. Level Premium Life InsuranceThis is a type of insurance for which the cost is distributed evenly over the premium payment period. The premium remains the same from year to year and is more than actual cost of protection in the earlier years of the policy and less than the actual cost of protection in the later years. The excess paid in the early years builds up a reserve to cover the higher cost in the later years. life cycle costingthe accumulation of costs for activities that Life ExpectancyThe average number of years of Life remaining for a group of people of a given age and gender according to a particular mortality table. Life Income FundCommonly known as a LIF, this is One of the options available to locked in Registered Pension Plan (RPP) holders for income payout as opposed to Registered Retirement Savings Plan (RRSP) holders choice of payout through Registered Retirement Income Funds (RRIF). A LIF must be converted to a unisex annuity by the time the holder reaches age 80. Life Insuranceinsurance that provides protection against an economic loss caused by death of the person insured. Life Insurance (Credit Insurance)Group Term Life insurance that pays or reduces the balance due on a loan if the borrower dies before the loan is repaid. Life InsuredThe person who's Life is protected by an individual policy. Life Underwriterinsurance agent. Lifecycle costingAn approach to costing that estimates and accumulates the costs of a product/service over limited liability companyan organizational form that is a hybrid of the corporate and partnership organizational make-or-buy decisiona decision that compares the cost of Managerial decisionsdecisions concerning the operation of the firm, such as the choice of firm size, firm Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |