Terms & Definitions - A
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Accrued interest: Interest that has been earned but not received.
Accumulation plan: An arrangement which enables an investor to purchase mutual fund shares regularly in large or small amounts.
Actively-at-work provision: A provision which requires an employee to be actively at work on the date they are eligible for coverage. If they are ill or on leave-of-absence coverage would not become effective until they return to active full-time employment. However, if an employee is on a scheduled vacation they are considered to be actively-at-work.
Administrative Services Only (ASO): ASO is an arrangement whereby an insurance company, or other organization, is contracted for the sole purpose of adjudicating claims. The administrator settles claims but does not guarantee payment because the plan is uninsured. There are no reserves established by the administrator under ASO arrangements and the entire financial risk is borne by the employer unless there are Stop-Loss provisions included.
Amortization : The gradual reduction of debt over a fixed period of time.
Example, if a mortgage is amortized over 25 years, payments consist of a blend of principal and interest, early payments being mostly interest, later payments mostly principal. The full debt will be retired in 25 years.
Annual Report: A financial report sent yearly to a publicly held firm's shareholders. This report must be audited by independent auditors.
Annuitant: A person who receives annuity payments.
Annuity: A contract providing for a series of payments to be made or received at regular intervals. For retirement purposes, an annuity is an income vehicle that provides a guaranteed, regular income based on age, the amount you invest, the type of annuity you buy, and interest rates at the time of purchase. See also: cashable annuity, deferred annuities, guaranteed-term life annuity, income-reducing annuity, indexed annuity, insured annuity, joint-and-last survivor annuity, life annuity, prescribed annuity, term certain annuity.
Ask price: A proposal to sell a specific quantity of securities at a named price.
Asset: Any property or investment that has monetary value.
Asset allocation: Mixing assets such as, cash, bonds, stocks, etc., in a widely diversified portfolio. Most professional money managers agree that holding the right blend of investments can account for 80 percent or more of gains in the long run.
Assuris: (Formerly CompCorp) www.assuris.ca - A federally incorporated, non-profit company established by the CLHIA to protect Canadian consumers against loss of benefits in the event a life or health insurance company becomes insolvent. All life insurance companies licensed in Canada are required to become members of Assuris and to remain members as long as they have any business in Canada.
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