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Definition of Useful life
The estimated life span of a fixed asset, during which it can be expected to
A non-cash expense that provides a source of free cash flow. Amount allocated during the
The amount management estimates a piece of equipment will be worth at the end of its useful life, either as a trade-in or if it were sold for scrap.
An expense that spreads the cost of an asset over its useful life.
(1) The estimated useful life of the fixed asset being depreciated is
Refers to the generally accepted accounting principle of allocating
The expected revenue to be garnered from the sale of a fixed asset at the
The average useful life of a company's collective amortizable asset base.
A change in the implementation of an existing accounting
An amortization period that continues beyond a long-lived asset's economic useful life.
Assets having a useful life greater than one year but the duration of the 'long term' will vary with the context in which the term is applied.
Also referred to as the weighted-average life (WAL). The average number of years that each
A monthly fixed-dollar payment beginning at retirement age. It is nominal
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
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
life cycle costing
the accumulation of costs for activities that
product life cycle
a model depicting the stages through
The period over which a company expects to be able to use an asset.
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
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.
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.
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.
Component that provides life coverage during the insured's life.
This term has two quite different meanings. First, it may
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