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Financial Terms | |
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Definition of SpanSpanTo cover all contingencies within a specified range.
Related Terms:MaturityThe time when a policy or annuity reaches the end of its span. Useful lifeThe estimated life span of a fixed asset, during which it can be expected to WarrantA security entitling the holder to buy a proportionate amount of stock at some specified future date Average lifeAlso referred to as the weighted-average life (WAL). The average number of years that each Average maturityThe average time to maturity of securities held by a mutual fund. Changes in interest rates Balloon maturityAny large principal payment due at maturity for a bond or loan with or without a a sinking 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. ![]() Current maturityCurrent time to maturity on an outstanding debt instrument. Deferred nominal life annuityA monthly fixed-dollar payment beginning at retirement age. It is nominal Economic lifeThe period over which a company expects to be able to use an asset. 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. Held-to-Maturity SecurityA debt security for which the investing entity has both the positive 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. 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 Maturity dateThe date when the issuer returns the final face value of a bond Maturity DateDate on which a debt is due for payment. Maturity factoringFactoring arrangement that provides collection and insurance of accounts receivable. Maturity phaseA phase of company development in which earnings continue to grow at the rate of the maturity premiumExtra average return from investing in longversus short-term Treasury securities. Maturity spreadThe spread between any two maturity sectors of the bond market. Maturity valueRelated: par value. Mortgage Life insurance (Credit Insurance)Decreasing term life insurance that provides a death benefit amount corresponding to the decreasing amount owed on a mortgage. Original maturitymaturity at issue. For example, a five year note has an original maturity of 5 years; one product life cyclea model depicting the stages through Projected maturity dateWith CMOs, final payment at the end of the estimated cash flow window. Remaining maturityThe length of time remaining until a bond's maturity. Return-to-maturity expectationsA variant of pure expectations theory which suggests that the return that an Shelf lifeThe time period during which inventory can be retained in stock and beyond Shelf life controlDeliberate usage of the oldest items first, in order to avoid exceeding Split Dollar Life InsuranceThe 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. Stated maturityFor the CMO tranche, the date the last payment would occur at zero CPR. Temporary Life InsuranceTemporary 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 LifeA product that provides life coverage for a specified duration typically not beyond the age of 75. Term life insuranceA contract that provides a death benefit but no cash build-up or investment component. Term Life InsuranceA 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. Term to maturityThe time remaining on a bond's life, or the date on which the debt will cease to exist and Term to MaturityPeriod of time from the present to the redemption date of a bond. Time to maturityThe time remaining until a financial contract expires. Also called time until expiration. Universal lifeA whole life insurance product whose investment component pays a competitive interest rate Universal LifeAn unbundled life product with a separate investment component. It typically does not participate in companies profits. Variable life insurance policyA whole life insurance policy that provides a death benefit dependent on the Weighted average lifeSee:Average life. Weighted average maturityThe WAM of a MBS is the weighted average of the remaining terms to maturity Weighted average remaining maturityThe average remaining term of the mortgages underlying a MBS. Whole LifeComponent that provides life coverage during the insured's life. Whole life insuranceA contract with both insurance and investment components: (1) It pays off a stated Yield to maturityThe percentage rate of return paid on a bond, note or other fixed income security if you Yield to MaturityThe measure of the average rate of return that will be earned on a Yield to maturityA measure of the average rate of return that will be earned yield to maturityInterest rate for which the present value of the bond’s payments equals the price. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |