Terms & Definitions - T
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T-Bill: see below - Treasury Bill
Target Loss Ratio (TLR): This is the ratio at which the insurance company has covered both incurred claims and their cost of administering the plan. It is calculated by subtracting the carrier’s total cost, as a percentage, from 100%. (i.e. If the carrier’s total expenses equals 17% of the premium the target loss ratio would be 83% of premium.) As groups grow in size the expenses, as a percentage of the larger premium, is less. Therefore, the larger the group the higher the TLR. Also referred to as the Break-even Loss Ratio.
Tax credit: An income tax credit that directly reduces the amount of income tax paid by offsetting other income tax liabilities.
Tax deduction: A reduction of total income before the amount of income tax payable is calculated.
Technical analysis: A method of evaluating future security prices and market directions based on statistical analysis of variables such as trading volume, price changes, etc., to identify patterns.
Term insurance: Temporary life insurance that covers the policyholder for a specific time.
Term to 90 annuity: An annuity that pays a fixed amount each year until it is exhausted in the year that the annuitant turns 90.
Term-certain annuity: Provides a fixed monthly income until you turn age 90. If you die earlier, payments continue t your surviving spouse until what would have been your 90th birthday. If your spouse is younger, you can base this type of annuity on their age, thereby extending the payment schedule. If you don't have a surviving spouse, the remaining payments are cashed out according to the insurance company's "commuted value" formula and are paid to your estate. In addition to life insurance companies, term-certain annuities are also offered by banks and trust companies.
Thin Market: A market in which there are comparatively few buyers and/or sellers. The phrase may apply to a single security or to the entire market.
Third Party Administration (TPA): The method of administration whereby a third party (neither the insurer or the policyholder) maintains all the records regarding the persons covered under his or her group insurance plan. The third party may be the advisor or a specialized administrative body. The third party prepares the premium statements for each premium due date and submits it with the premium cheque to the insurer. In certain instances, upon the approval of the insurer, the third party administrator may also be involved in the claims payment process.
Timing the market: This is where you attempt to guess when markets will go up or down and investing accordingly.
Trade: A securities transaction.
Treasury bill (T-bill): Short-term government debt. Treasury bills bear no interest, but are sold at a discount. The difference between the discount price and par value is the return to be received by the investor.
Trend Factor: Most carriers include a trend factor in the renewal rating of the dental benefit. This is in addition to the fee guide adjustment and reflects the annual increase in claims due to pure utilization. See Inflation Factor.
Trust: A legal arrangement under which title to property or assets is given to a third party, called a trustee, who manages it for the benefit of a beneficiary or beneficiaries.
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