Vocabulary

• Insurance – A contract in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.
• Financial Planning – The process of determining a person's or organization's financial goals, purposes in life and life's priorities, and after setting these goals, devising a plan of action with specific actions to achieve these goals.
• Risk Management – The practice of identifying potential risks in advance, analyzing them and taking precautionary steps to reduce the risk.
• Premium – The amount of money that an individual or business must pay for an insurance policy.
• Policy – A contract or plan of insurance.
• Insurer – A person or company offering insurance policies.
• Insured – A person or entity who is covered by an insurance policy.
• Claim – A formal request to an insurance company asking for a payment based on the terms of the insurance policy.
• Liability – The state of being responsible for something, especially by law.
• Coverage – The amount of risk or liability that is covered for an individual or entity by way of insurance services.
• Deductible – The amount you pay out-of-pocket before the insurance company begins to cover any costs.
• Underwriting – The process by which an insurance company determines the risk and charges a premium for the coverage.
• Life Insurance – A contract that pays a specified amount to a designated beneficiary upon the death of the insured person.
• Health Insurance – Insurance against the risk of incurring medical expenses among individuals.
• Property Insurance – Insurance that provides protection against most risks to property, such as fire, theft and some weather damage.
• Auto Insurance – Policy purchased by vehicle owners to mitigate costs associated with getting into an auto accident.
• Casualty Insurance – A type of insurance that protects against losses not directly involving the insurer's own property.
• Reinsurance – The practice of insurers transferring portions of risk portfolios to other parties to reduce the likelihood of paying a large obligation.
• Annuity – A financial product that pays out a fixed stream of payments to an individual, primarily used as an income stream for retirees.
• Mutual Fund – An investment program funded by shareholders that trades in diversified holdings and is professionally managed.
• Bond – A financial instrument representing a loan made by an investor to a borrower.
• Stock – A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.
• Asset – Any resource owned by an individual or a business that has economic value.
• Liability Insurance – Insurance that provides the insured party with protection against claims resulting from injuries and damage to other people or property.
• Beneficiary – A person who derives advantage from something, especially a trust, will, or life insurance policy.
• Actuary – A business professional who deals with the financial impact of risk and uncertainty.
• Pension – A regular payment made during a person's retirement from an investment fund to which that person or their employer has contributed during their working life.
• Financial Advisor – A professional who provides financial services to clients based on their financial situation.
• Investment – The act of allocating resources, usually money, with the expectation of generating an income or profit.
• Retirement Planning – The process of determining retirement income goals and the actions and decisions necessary to achieve those goals.
• Estate Planning – The preparation of tasks that serve to manage an individual's asset base in the event of their incapacitation or death.
• Tax Planning – The analysis of a financial situation or plan from a tax perspective to align financial goals with tax efficiency planning.
• Credit – The ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.
• Loan – A thing that is borrowed, especially a sum of money that is expected to be paid back with interest.
• Interest – The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.
• Mortgage – A loan in which property or real estate is used as collateral.
• Bankruptcy – A legal proceeding involving a person or business that is unable to repay outstanding debts.
• Inflation – The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.
• Diversification – The process of allocating capital in a way that reduces the exposure to any one particular asset or risk.
• Portfolio – A range of investments held by a person or organization.
• Capital – Wealth in the form of money or other assets owned by a person or organization or available for a purpose such as starting a company or investing.
• Equity – The value of an asset after deducting the cost of liabilities.
• Cash Flow – The total amount of money being transferred into and out of a business, especially as affecting liquidity.
• Liquidity – The availability of liquid assets to a market or company.
• Return on Investment (ROI) – A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments.
• Dividend – A sum of money paid regularly (typically quarterly) by a company to its shareholders out of its profits (or reserves).
• Depreciation – The gradual decrease in the economic value of the capital stock of a firm, nation or other entity, either through physical depreciation, obsolescence or changes in the demand for the services of the capital in question.
• Leverage – The use of borrowed money to increase the potential return of an investment.
• Credit Score – A number assigned to a person that indicates to lenders their capacity to repay a loan.
• Budget – An estimate of income and expenditure for a set period of time.