|Debt (Credit Insurance)|
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Definition of Debt (Credit Insurance)
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.
Provides additional financial security should an insured person be dismembered or lose the use of a limb as the result of an accident.
An offset to the accounts receivable balance, against which
Refers to the reduction of debt by regular payments of interest and principal in order to pay off a loan by maturity.
An account receivable that cannot be collected.
The amount of accounts receivable that is not expected to be collected.
Refers to accounts receivable from credit sales to customers
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.
The requirement that a claim holder voting against a plan of reorganization
A consumer who borrows money from a lender.
Better 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.
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.
insurance or insurability provided on current or future children of insured.
In 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.
Refers to the fact that the merger of two firms decreases the probability of default on
An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes.
Comparative credit analysis
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
Consumer Credit Protection Act
A federal Act specifying the proportion of
Cost of Debt
The cost of debt (bonds, loans, etc.) that a company is charged for
Cost of Insurance
The 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.
Buying or selling goods or services now with the intention of payment following at some time in
One side of a journal entry, usually depicted as the right side.
A rating of a company's credit (ability to payback debt), usually by a third party credit agency.
On your bank statement, 'credit' represents funds that you have deposited into your account. The opposite of a credit is a debit.
The process of analyzing information on companies and bond issues in order to estimate the
Procedure to determine the likelihood a customer will pay its bills.
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 decline in the ability or willingness of banks to lend.
Purchase of the financial guarantee of a large insurance company to raise funds.
A loan receivable that has proven uncollectible and is written off.
A record of the funds which have been credited to your account.
The length of time for which the customer is granted credit.
Standards set to determine the amount and nature of credit to extend to customers.
Restriction of loans by lenders so that not all borrowers willing to pay the current interest rate are able to obtain loans.
The risk that an issuer of debt securities or a borrower may default on his obligations, or that the
Financial and moral risk that an obligation will not be paid and a loss will result.
A statistical technique wherein several financial characteristics are combined to form a single
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.
The interest rate offered on an investment type insurance policy.
Lender of money.
Person or business that is owed money.
Creditor (Credit Insurance)
A lender or lending institution that offers financing and loans to a borrower, for the purpose of acquiring a commodity.
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.
Purchases of goods or services from suppliers on credit to whom the debt is not yet paid. Or a
Critical Illness Insurance
Coverage 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 Insurance
Also 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.
Borrowings from financiers.
Funds owed to another entity.
Ability to borrow. The amount a firm can borrow up to the point where the firm value no
An assessment of ability and willingness to repay a loan from anticipated future cash flow or other sources.
The amount of borrowing that leasing displaces. Firms that do a lot of leasing will be
Indicator of financial leverage. Compares assets provided by creditors to assets provided
A comparison of debt to equity in a company's capital structure.
Raising loan capital through the creation of debt by issuing a form of paper evidencing amounts owed and payable on specified dates or on demand.
An asset requiring fixed dollar payments, such as a government or corporate bond.
Any financial asset corresponding to a debt, such as a bond or a treasury bill.
The amplification of the return earned on equity when an investment or firm is financed
A bond covenant that restricts in some way the firm's ability to incur additional indebtedness.
The market for trading debt instruments.
Total debt divided by total assets.
The percentage of debt that is used in the total capitalization of a
Reducing the principal and/or interest payments on LDC loans.
IOUs created through loan-type transactions - commercial paper, bank CDs, bills, bonds, and
A security representing a debt relationship with an enterprise, including a government
Interest payment plus repayments of principal to creditors, that is, retirement of debt.
Debt-service coverage ratio
Earnings before interest and income taxes plus one-third rental charges, divided
Debt service parity approach
An analysis wherein the alternatives under consideration will provide the firm
A set of transactions (also called a debt-equity swap) in which a firm buys a country's dollar bank
A widely used financial statement ratio to assess the
Debtor in possession
A firm that is continuing to operate under Chapter 11 bankruptcy process.
New debt obtained by a firm during the Chapter 11 bankruptcy process.
Sales to customers who have bought goods or services on credit but who have not yet paid their debt.
Demand line of credit
A bank line of credit that enables a customer to borrow on a daily or on-demand basis.
insurance 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.
Life insurance or annuity product in which the cash value and benefit level fluctuate according to the performance of an equity portfolio.
Errors and Omissions Insurance
insurance 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.
Intermediate-term loans of Eurocurrencies made by banking syndicates to corporate and
Revolving credit without maturity.
Export Credit Insurance
The granting of insurance to cover the commercial and political risks of selling in foreign markets.
Federal credit agencies
Agencies of the federal government set up to supply credit to various classes of
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.
Firm's net value of debt
Total firm value minus total firm debt.
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
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.
Full faith-and-credit obligations
The security pledges for larger municipal bond issuers, such as states and
debt maturing after more than one year.
debt with more than 1 year remaining to maturity.
Group Life Insurance
This 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 contract
A contract promising a stated nominal interest rate over some specific time
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