|Deferred nominal life annuity
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Definition of Deferred nominal life annuity
Deferred nominal life annuity
A monthly fixed-dollar payment beginning at retirement age. It is nominal
the present value of a finite stream of cash flows for every beginning $1 of cash flow.
A regular periodic payment made by an insurance company to a policyholder for a specified period
An annuity with n payments, wherein the first payment is made at time t = 0 and the last
Present value of $1 paid for each of t periods.
An annuity with a first payment on full period hence, rather than immediately.
Also referred to as the weighted-average life (WAL). The average number of years that each
The formal name for the load of a back-end load fund.
A provision that prohibits the company from calling the bond before a certain date. During this
A common term for convertible bonds because of their equity component and the
The most distant months of a futures contract. A bond that sells at a discount and does not
A non-cash expense that provides a source of free cash flow. Amount allocated during the
Tax-advantaged life insurance product. deferred annuities offer deferral of taxes with the
The equivalent amount per year for some number of years that has a present
In name only. Differences in compounding cause the nominal rate to differ from the effective
An effective rate per period multiplied by the number of periods in a year.
Nominal cash flow
A cash flow expressed in nominal terms if the actual dollars to be received or paid out are given.
Nominal exchange rate
The actual foreign exchange quotation in contrast to the real exchange rate that has
Nominal interest rate
The interest rate unadjusted for inflation.
Price quotations on futures for a period in which no actual trading took place.
Normal annuity form
The manner in which retirement benefits are paid out.
RAMs (Reverse-annuity mortgages)
Mortgages in which the bank makes a loan for an amount equal to a
Single-premium deferred annuity
An insurance policy bought by the sponsor of a pension plan for a single
Tax-deferred retirement plans
Employer-sponsored and other plans that allow contributions and earnings to
Term life insurance
A contract that provides a death benefit but no cash build-up or investment component.
A whole life insurance product whose investment component pays a competitive interest rate
Variable life insurance policy
A whole life insurance policy that provides a death benefit dependent on the
Weighted average life
Whole life insurance
A contract with both insurance and investment components: (1) It pays off a stated
An approach to costing that estimates and accumulates the costs of a product/service over
A series of payments or deposits of equal size spaced evenly over
annuity where the payments are to be made at the beginning of
Nominal Interest Rate
The rate of interest quoted, or stated, to be paid on a security
An annuity where the payments are made at the end of each
a series of equal cash flows being received or paid at the beginning of a period
pay related to current performance
life cycle costing
the accumulation of costs for activities that
a series of equal cash flows being received
product life cycle
a model depicting the stages through
current compensation that is taxed at a future date
A series of payments over a period of time. The payments are usually
The period over which a company expects to be able to use an asset.
The estimated life span of a fixed asset, during which it can be expected to
Equally spaced level stream of cash flows.
Level stream of cash flows starting immediately.
Present value of an annuity of $1 per period.
nominal interest rate
Rate at which money invested grows.
Exchange Rate, Nominal
The price of one currency in terms of another, in this book defined as number of units of foreign currency per dollar.
Interest Rate, Nominal
Payment for the use of borrowed funds, measured as a percentage per year of these funds.
Measured in money terms, in current rather than real dollars. Contrast with real.
Individual Retirement Annuity
An IRA comprised of an annuity that is managed
Deferred Income Tax Expense
That portion of the total income tax provision that is the result
Deferred Tax Asset
Future tax benefit that results from (1) the origination of a temporary difference
Deferred Tax Liability
Future tax obligation that results from the origination of a temporary
EBDDT - Earnings before depreciation and deferred taxes
This measure is used principally by
The time period during which inventory can be retained in stock and beyond
Shelf life control
Deliberate usage of the oldest items first, in order to avoid exceeding
A contract which provides an income for a specified period of time, such as a certain number of years or for life. An annuity is like a life insurance policy in reverse. The purchaser gives the life insurance company a lump sum of money and the life insurance company pays the purchaser a regular income, usually monthly.
Back To Back Annuity
This term refers to the simultaneous issue of a life annuity with a non-guaranteed period and a guaranteed life insurance policy [usually whole life or term to 100]. The face value of the life insurance would be the same amount that was used to purchase the annuity. This combination of life annuity providing the highest payout of all types of annuities, along with a guaranteed life insurance policy allowed an uninsurable person to convert his/her RRSP into the best choice of annuity and guarantee that upon his/her death, the full value of the annuity would be paid tax free through the life insurance policy to his family members. However, in the early 1990's, the Federal tax authorities put a stop to the issuing of standard life rates to rated or uninsurable applicants. Insuring a life annuity in this manner is still an excellent way to provide guaranteed tax free funds to family members but the application for the annuity and the application for the life insurance are separate transactions and today, most likely conducted through two different insurance companies so that there is no suspicion of preferential treatment given to the life insurance application.
An annuity providing for income payments to commence at a specified future time.
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.
Level Premium Life Insurance
This 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.
The 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 Fund
Commonly 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.
Split Dollar Life Insurance
The split dollar concept is usually associated with cash value life insurance where there is a death benefit and an accumulation of cash value. The basic premise is the sharing of the costs and benefits of a life insurance policy by two or more parties. Usually one party owns and pays for the insurance protection and the other owns and pays for the cash accumulation. There is no single way to structure a split dollar arrangement. The possible structures are limited only by the imagination of the parties involved.
Temporary Life Insurance
Temporary insurance coverage is available at time of application for a life insurance policy if certain conditions are met. Normally, temporary coverage relates to free coverage while the insurance company which is underwriting the risk, goes through the process of deciding whether or not they will grant a contract of coverage. The qualifications for temporary coverage vary from insurance company to insurance company but generally applicants will qualify if they are between the ages of 18 and 65, have no knowledge or suspicions of ill health, have not been absent from work for more than 7 days within the prior 6 months because of sickness or injury and total coverage applied for from all sources does not exceed $500,000. Normally a cheque covering a minimum of one months premium is required to complete the conditions for this kind of coverage. The insurance company applies this deposit towards the cost of a policy at its issue date, which may be several weeks in the future.
Term Life Insurance
A plan of insurance which covers the insured for only a certain period of time and not necessarily for his or her entire life. The policy pays a death benefit only if the insured dies during the term.
Nominal Interest Rate
The contracted, or stated, interest rate, undeflated for price level changes.
Periodic payments made to an individual under the terms of the policy.
The time between each payment under an annuity.
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.
Guaranteed Interest Annuity (GIA)
Interest bearing investment with fixed rate and term.
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.
Insurance 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.
The person who's life is protected by an individual policy.
Mortgage Life insurance (Credit Insurance)
Decreasing term life insurance that provides a death benefit amount corresponding to the decreasing amount owed on a mortgage.
A product that provides life coverage for a specified duration typically not beyond the age of 75.
An unbundled life product with a separate investment component. It typically does not participate in companies profits.
A form of annuity policy under which the amount of each benefit is not guaranteed or specified. The amounts fluctuate according to the earnings of a separate investment account.
Component that provides life coverage during the insured's life.
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