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Definition of credit policy
Standards set to determine the amount and nature of credit to extend to customers.
A policy under which the insurance company promises to pay a benefit of the person who is insured.
The requirement that a claim holder voting against a plan of reorganization
Procedures followed by a firm in attempting to collect accounts receivables.
A method of analysis in which a firm is compared to others that have a desired
credit granted by a firm to consumers for the purchase of goods or services. Also called
The process of analyzing information on companies and bond issues in order to estimate the
Purchase of the financial guarantee of a large insurance company to raise funds.
The length of time for which the customer is granted credit.
The risk that an issuer of debt securities or a borrower may default on his obligations, or that the
A statistical technique wherein several financial characteristics are combined to form a single
The interest rate offered on an investment type insurance policy.
Lender of money.
A bank line of credit that enables a customer to borrow on a daily or on-demand basis.
An established guide for the firm to determine the amount of money it will pay as dividends.
Intermediate-term loans of Eurocurrencies made by banking syndicates to corporate and
Revolving credit without maturity.
Federal credit agencies
Agencies of the federal government set up to supply credit to various classes of
The use of government spending and taxing for the specific purpose of stabilizing the economy.
Five Cs of credit
Five characteristics that are used to form a judgement about a customer's creditworthiness:
Foreign tax credit
Home country credit against domestic income tax for foreign taxes paid on foreign
Full faith-and-credit obligations
The security pledges for larger municipal bond issuers, such as states and
Investment tax credit
Proportion of new capital investment that can be used to reduce a company's tax bill
Letter of credit (L/C)
A form of guarantee of payment issued by a bank used to guarantee the payment of
Line of credit
An informal arrangement between a bank and a customer establishing a maximum loan
Line of credit
An informal arrangement between a bank and a customer establishing a maximum loan
Actions taken by the Board of Governors of the Federal Reserve System to influence the
Perfect market view (of dividend policy)
Analysis of a decision on dividend policy, in a perfect capital
Policy asset allocation
A long-term asset allocation method, in which the investor seeks to assess an
credit granted by a firm to consumers for the purchase of goods or services.
Revolving credit agreement
A legal commitment wherein a bank promises to lend a customer up to a
Revolving line of credit
A bank line of credit on which the customer pays a commitment fee and can take
Signaling view (on dividend policy)
The argument that dividend changes are important signals to investors
Tax differential view ( of dividend policy)
The view that shareholders prefer capital gains over dividends,
credit granted by a firm to another firm for the purchase of goods or services.
Traditional view (of dividend policy)
An argument that "within reason," investors prefer large dividends to
Variable life insurance policy
A whole life insurance policy that provides a death benefit dependent on the
Buying or selling goods or services now with the intention of payment following at some time in
Purchases of goods or services from suppliers on credit to whom the debt is not yet paid. Or a
One side of a journal entry, usually depicted as the right side.
Procedures to collect and monitor receivables.
Procedure to determine the likelihood a customer will pay its bills.
line of credit
Agreement by a bank that a company may borrow at any time up to an established limit.
A monetary policy of matching wage and price increases with money supply increases so that the real money supply does not fall and push the economy into recession.
A policy designed to increase an economy's prosperity at the expense of another country's prosperity.
Decreasing inflation by immediately decreasing the money growth rate to a new, low rate. Contrast with gradualism.
A decline in the ability or willingness of banks to lend.
Restriction of loans by lenders so that not all borrowers willing to pay the current interest rate are able to obtain loans.
Demand Management Policy
Fiscal or monetary policy designed to influence aggregate demand for goods and services.
A policy that is a conscious, considered response to each situation as it arises. Contrast with policy rule.
A change in government spending or taxing, designed to influence economic activity.
A policy designed to lower inflation without reducing aggregate demand. Wage/price controls are an example.
Investment Tax Credit
A reduction in taxes offered to firms to induce them to increase investment spending.
Actions taken by the central bank to change the supply of money and the interest rate and thereby affect economic activity.
Theory that anticipated policy has no effect on output.
A formula for determining policy. Contrast with discretionary policy.
Tax-Related Incomes Policy (TIP)
Tax incentives for labor and business to induce them to conform to wage/price guidelines.
Consumer Credit Protection Act
A federal Act specifying the proportion of
Policy Acquisition Costs
Costs incurred by insurance companies in signing new policies, including expenditures on commissions and other selling expenses, promotion expenses, premium
A companyâ€™s stated goal for how soon a customer order will be
Creditor Proof Protection
The creditor proof status of such things as life insurance, non-registered life insurance investments, life insurance RRSPs and life insurance RRIFs make these attractive products for high net worth individuals, professionals and business owners who may have creditor concerns. Under most circumstances the creditor proof rules of the different provincial insurance acts take priority over the federal bankruptcy rules.
This is an administrative fee which is part of most life insurance policies. It ranges from about $40 to as much as $100 per year per policy. It is not a separate fee. It is incorporated in the regular monthly, quarterly, semi-annual or annual payment that you make for your policy. Knowing about this hidden fee is important because some insurance companies offer a policy fee discount on additional policies purchased under certain conditions. Sometimes they reduce the policy fee or waive it altogether on one or more additional policies purchased at the same time and billed to the same address. The rules are slightly different depending on the insurance company. There could be enormous savings if several people in the same family or business were intending to purchase coverage at the same time.
This is the person who owns a life insurance policy. This is usually the insured person, but it may also be a relative of the insured, a partnership or a corporation. There are instances in marriage breakup (or relationship breakup with dependent children) where appropriate life insurance on the support provider, owned and paid for by the ex-spouse receiving the support is an acceptable method of ensuring future security.
A rating of a company's credit (ability to payback debt), usually by a third party credit agency.
A loan receivable that has proven uncollectible and is written off.
Financial and moral risk that an obligation will not be paid and a loss will result.
Conditions under which credit is extended by a lender to a borrower.
credit unions are community based financial co-operatives and most offer a full range of services. All are owned and controlled by members who are also shareholders. credit unions are regulated provincially and insured by a stabilization fund, deposit insurance or guarantee corporation.
Person or business that is owed money.
Export Credit Insurance
The granting of insurance to cover the commercial and political risks of selling in foreign markets.
Formalized Line of Credit
A contractual commitment to make loans to a particular borrower up to a specified maximum during a specified period, usually one year.
Full Credit Period
The period of trade credit given by a supplier to its customer.
A course of action adopted by a financial institution to guide and usually determine present and future decisions in the light of given conditions.
Letters of Credit
A letter of credit is a guarantee of payment by a bank (issuing institution)to a third party for a specific amount of money, if certain conditions are met.
Line of Credit
An agreement negotiated between a borrower and a lender which establishes the maximum amount against which a borrower may draw. The agreement also sets out other conditions, such as how and when money borrowed against the line of credit is to be repaid.
Operating Line of Credit
A bank's commitment to make loans to a particular borrower up to a specified maximum for a specified period, usually one year.
Line of credit against which funds may be borrowed at any time, with regular scheduled repayments of a predetermined minimum amount.
Period of delay allowed by a firm's supplier to pay its invoices. Frequently, the terms are : 2% discount on invoice if paid in 10 days or net if paid in 30 days.
On your bank statement, 'credit' represents funds that you have deposited into your account. The opposite of a credit is a debit.
An organization that provides financial institutions with credit information concerning existing or potential customers who are looking to obtain credit services.
A revolving source of credit with a pre-established limit. You have to pay interest on a credit card if you have an outstanding balance.
A record of the funds which have been credited to your account.
line of credit
A revolving source of credit with a pre-established limit. You access the funds only as you need them, and any amount that you pay back becomes accessible to you again. Unlike a personal loan, a line of credit permits you to write cheques and make bank machine withdrawals, and requires you to pay interest only on the funds that you actually use.
personal line of credit (PLC)
A revolving source of credit with a pre-established limit. You access the funds only as you need them, and any amount that you pay back becomes accessible to you again. Unlike a personal loan, a PLC permits you to write cheques and make bank machine withdrawals, and requires you to pay interest only on the funds that you actually use.
secured loan or line of credit
A lump sum of funds (loan), or a revolving source of credit with a pre-established limit (line of credit), for which the customer must provide collateral.
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.
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.
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.
Borrower (Credit Insurance)
A consumer who borrows money from a lender.
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.
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 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.
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.
Disability Insurance (Credit Insurance)
Group Insurance designed to cover monthly obligations due to a borrower being unable to work due to sickness or injury.
This policy governs Canada Life's actions regarding distribution of dividends to policyholders. It's goal is to achieve a dividend distribution that is equitable and timely, and which gives full recognition of the need to ensure the ongoing solidity of the company. It also specifies that distribution to individual policyholders must be equitable between dividend classes and policyholder generations, and among policyholders within any class.
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 Life
One 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.
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.
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