Holistic Insurance and Financial Services Inc.

Accident and Health Insurance
An insurance coverage that pays benefits, sometimes including reimbursement for loss of income, in case of accidental injury, sickness or accidental death.

Accidental Death Benefit
A benefit in addition to a life insurance policy, payable if the insured dies as the result of an accident.

Accrued Interest
Interest earned but not yet paid out to the investor. This interest must be declared as income for tax purposes each year, whether or not it has been received.

Alternative Minimum Tax
A method of calculating income tax that disallows certain deductions, credits and exclusions, setting a minimum tax rate to avoid tax avoidance.

Amortization
The process of gradually paying out debt or obligation, e.g. a mortgage, or car loan, taxation purposes.

Annuitant
Individual on whose life the insurance contract depends.

Annuity
A contract that provides an income for a specified period of time. The purchaser gives a life insurance company a lump sum of money and the life insurance company pays the purchaser a regular income until contract expiry.

Assets
Anything owned by an individual that has value

Asset Allocation
The process of positioning assets within a portfolio to maximize return for a given level of risk.

Asset Mix
The mix of assets help within an investment portfolio

Attribution Rules
Tax legislation under which certain income earned on assets transferred to your spouse or a dependent will be treated as your own for tax purposes.

Average Tax Rate
The tax rate computed by dividing the total income tax liability by the total income

B

Basis Point
Used frequently in bond pricing, refers to 1/100th of 1 percent.

Bear Market
When the stock market is in a declining state.

Bearer Security
A certificate not registered in the name of an investor, rather where the holder of the security is considered the owner.

Beneficiary
A person or organization who is eligible to receive benefits under a will, insurance policy, retirement plan, annuity, trust, or other contracts.

Book Value
Used to describe the value of an investment at the time of initial purchase less any fees payable.

Bull Market
When the stock market is advancing overall, it is said to be a bull market.
Business Life Insurance

Life insurance purchased by a business on the life of a member of the firm, often purchased to protect the company from the loss of a partner or owner.

Buy/Sell Agreement
An agreement entered into by the owners of a business to define the conditions under which the interests of each shareholder will be bought and sold.

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C

Canada Education Savings Grant (CESG)
The federal governments contribution into an Registered Education Savings Plan (RESP) of 20% of the first $2,000.00 contributed per year.

Canadian Pension Plan (CPP)
Government sponsored plan to provide Canadians with retirement income.

Capital Gain
Profit realized on the sale of securities, based on increase in market value of the security.

Cash Surrender Value
The amount available to the owner of a life insurance policy upon voluntary termination of the policy before it becomes payable by the death of the life insured.

Certificate of Insurance
A statement of insurance coverage issued to an individual insured under a group insurance contract, outlining benefits and provisions applicable to the member.

Claim
A request for payment from a loss covered by an insurance policy.

Client Held Account
The arrangement where assets in an account are held in the individual's name rather than a nominee's name.

Closed-End Investment Funds
Professionally managed portfolios of securities that after the original issue of shares only occasionally issue additional shares to raise more capital.

Collateral
An asset held by a lender as a guarantee until the loan is discharged.

Compound Interest
Interest earned on an investment at periodic intervals (ie.12 months) added to initial principal amount and included in calculation of future interest payments.

Contingent Beneficiary
An individual who is entitled to the benefits of an insurance policy if the main beneficiary dies before the life insured.

Conversion Privilege
The right of an insured person to convert their current policy to an alternate form of insurance without evidence of insurability.

Conversion Right
Policyholder has the right to convert their existing policy to another different plan of permanent insurance within the specified time period, without providing evidence of insurability.

Cost-of-Living Rider
Benefit added to a life insurance policy under which the policy owner can purchase one-year term insurance equal to the percentage change in the consumer price index with no evidence of insurability.

Creditor Proof Protection
The status of a specific product, that under circumstances of bankruptcy, the product is protected from liquidation of the principles assets. bad faith for the specific purpose of avoiding creditors; these funds will not be creditor proof.

Critical Illness Insurance
Insurance policy that provides coverage if the policyholder suffers a specific health problem during the term of the policy.

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D

Death Benefit
The payment made to a beneficiary upon the death of the annuitant.

Deductible
An amount that the insurance holder pays, per claim or per accident, toward the total amount of an insured loss.

Deemed Disposition
Under certain circumstances, taxation rules assume that a transfer of property has occurred, even though there has not been an actual purchase or sale. i.e.. Upon the death of an individual property is valued as of date of death.

Deferred Annuity
An annuity contract in which income payments are to begin at some specified future date.

Defined Benefit Pension Plan
A pension plan where benefits are predetermined and the contributions may vary.

Defined Contribution Pension Plan
A plan where contributions by employees and the employer are fixed and the benefits depend on the contributions made and the investment income of plan assets.

Dependents' Insurance Rider
An optional life insurance policy rider that provides term insurance coverage on the life of a dependent of the insured.

Depreciation
A decrease in the value of property over a period of time due to the need to replace.

Disability Benefit
A life insurance policies rider providing for waiver of insurance premium, if the policyholder becomes totally and permanently disabled.

Disability Insurance
Insurance that pays you an ongoing income if you become disabled and are unable to pursue employment.

Disability
A physical or mental condition that makes an insured person incapable of performing one or more duties of his or her occupation.

Dismemberment Insurance
A form of health insurance that provides payment in case of loss by bodily injury of one or more body members (such as hands or feet) or the sight of one or both eyes.

Disposable Personal Income
The income available to people for spending and saving, after adjusting for taxation and expense necessities.

Diversification
The process of investing your assets in a wide array of investments in order to decrease exposure to risk.

Dividend
Payment to the holder of an equity, as a benefit of ownership, above market value appreciation.

Dollar Cost Averaging
A way of smoothing out your investment deposits by investing regularly. This can often be done by investing on a monthly or semi-monthly basis.

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E

Earned Income
Employment income derived from salary, wages, commissions, or fees.

Eligibility Date
The date on which an individual member of a specified group becomes eligible to apply for group insurance benefits.

Elimination Period
An amount of time at the beginning of a disability claim during which no benefits are paid.

Equities
Investment products that give the investor ownership of a property or company.

Errors and Omissions Insurance
Insurance coverage purchased that provides protection against loss incurred by a client because of some negligent act, error, oversight, or omission by the agent/ broker.

Estate Planning
Developing a plan to transfer all of your property upon death with the purpose of reducing taxation and maintaining estate assets.

Estate
The assets and liabilities of a person left at death.

Executor (Executrix)
A person named in a will to carry out the directions and requests of the deceased as stated in the will.

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F

Family Policy
A life insurance policy providing insurance on all or several family members.

Fiduciary
A person who has the legal responsibility to act in the best interests (in trust) for another individuals benefit.

Fixed Annuity
Annuity with periodic payments that are at a guaranteed fixed amount.

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G

Grace Period
A period of time that a policy owner does not have to pay renewal premiums without the policy being collapsed.

Gross Debt Service Ratio (GDS)
The total cost of housing payments (including principal, interest, taxes, and upkeep) divided by the family's total gross income. 30% is a standard benchmark for this rate not to exceed.

Group Insurance
Insurance issued on a group of people under a master contract.

Group Life Insurance
Life insurance provided to a group of people, usually an organization, the cost of which is based on underwriting of the entire group to be insured.

Guaranteed Investment Certificate (GIC)
A deposit instrument set at a pre-determined rate of interest for a stated term; most commonly available from banks and trust companies.

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H

Health Insurance
Insurance against financial losses resulting from sickness or accidental bodily injury.

Holding Period Return (HPR)
Investment return at the end of period minus the beginning of period value divided by the beginning of period value.

Home Buyer’s Plan
A government program that allows you to remove funds tax free from your RRSP in order to purchase a home. Maximum amounts apply and all funds taken out of the RRSP must be paid back over a period of years.

Homeowners Policy
An insurance contract providing homeowners with property and liability coverage.

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I

Immediate Annuity
An annuity contract providing for immediate payments.

Income Splitting
A tax planning strategy of arranging for income to be transferred to family members who are in lower tax brackets, thus having the effect of reducing overall taxation.

Incontestable Clause
Clause which provides for voiding the contract of insurance for up to two years from the date of issue of the coverage if the life insured failed to disclose important information or if there has been a misrepresentation of a material fact.

Indexing
Adjusting of values over time to reflect the impact of inflation often using the Consumer Price Index (CPI).

Individual Insurance
Insurance purchased on an individual basis, covering only one person.

Inflation
Year over year measure of the increase in the cost of goods.

Insolvent
Having insufficient financial resources (assets) to meet financial obligations (liabilities).

Insurance
A contract under which people and organizations can exchange risk of a negative event for payment of a sum of money (a premium).

Insured Life
Person on whose life the policy is issued on.

Interest
The periodic payments borrowers (issuers) make to lenders for the use of their money prior to maturity and principal repayment.

Inter Vivos Trust (Living Trust)
A trust created by a person during his or her lifetime.

Intestate
Dying without a will, in such a case the provincial laws govern how assets are to be distributed and will appoint an executor to carry out the estate.

Irrevocable Beneficiary
Beneficiary designation that does not allow changes to be made without prior approval from the beneficiary.

Irrevocable Trust
A trust in which the creator does not reserve the right to reacquire the trust property.

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J K

Joint-and-Survivor Annuity
An annuity that provides income periodically, payable for the longer life time of the joint insured.

Joint Tenants with Rights of Survivorship (JTWROS)
Joint ownership of a property (investment) where upon the death of one of the joint owners, the property transfers into the names of the remaining owners.

Key-Person Insurance
An insurance contract designed to protect a firm against the loss of income resulting from the death or disability of a key employee (person).

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L

Lapsed Policy
Termination of a policy because of non-payment of premiums.

Last To Die Coverage
This means that there are two or more life insured on the same policy but the death benefit is paid out on the last person to die.

Level Premium Life Insurance
A type of insurance for which the cost is distributed evenly over the premium payment period, keeping the premiums at an even rate.

Level Term Life Insurance
A type of insurance in which the death benefit remains the same throughout the term of the plan.

Leverage
The use of debt in order to greater maximize investment returns.

Life Annuity
A contract that provides an income for the life of the policy holder.

Life Income Fund (LIF)
A contract available to locked in Registered Pension Plan (RPP) holders upon transfer from the company in which income is received yearly based on a formulation of investment assets.

Life Insurance
Insurance providing for the payment of benefits upon the death of the life insured.

Lifelong Learning Plan
A government program that allows you to withdraw funds from your RRSP investment tax free so that you may be able to upgrade your education. All funds removed from your RRSP must be paid back over a period of years, or it will become taxable.

Lifetime Disability Benefit
A benefit to help replace income lost by an insured person as long as they are disabled.

Limited Policy
An insurance policy that covers only specified accidents or sicknesses.

Liquidity
Ability to convert assets into cash or cash equivalents without significant loss of money or time.

Living Will
A will that specifically expresses the testator's desire, giving circumstances under which they should not be kept alive.

Long-Term Disability Income Insurance
Insurance issued to provide a reasonable replacement of a portion of an employee's earned income lost through serious and prolonged illness or injury during their work career.

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M

Management Expense Ratio (MER)
An account of all the expenses incurred in the management of a mutual fund.

Marginal Tax Rate
The rate of tax that would be applied to your next dollar of income earned.

Market Price
The price at which a security can be bought or sold at any particular time.

Maturity
The date on which a bond or other obligation is due to be repaid.

Misrepresentation
A false, incorrect, improper, or incomplete statement of a material fact, made in the application for a policy.

Money Market Fund
A Mutual fund that invests in the money market, usually in terms for less than one year.

Morbidity Tables
Statistical tables used by life insurance companies showing the probability of disease/disability of male and females at all ages.

Mortality Tables
Statistical table used by life insurance companies showing the probability of death of male and females at all ages.

Mortgage Life Insurance
An insurance that pays the balance owing upon a mortgage contract at the death of the insured party.

Mutual Fund (Open-Ended Investment Fund)
A company or trust who invests capital and distributes it’s earnings by issuing common shares or units.

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N O

Named Perils
Insurance which covers for specific perils listed in the policy rather than protection from physical loss.

Non-Contributory Pension Plan
A pension plan where the entire cost of the plan is paid for by the employer.

Non-Resident Tax
A tax levied by the government on investment income earned within the country by residence of other countries.

Non-Smoker Discount
Insurance discount for non-smokers based on their increased life expectancy.

Over-the Counter Market
A means of buying and selling securities that are not listed on a stock exchange.

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P Q

Paid-up insurance
Life insurance in which all the premiums have been paid.

Par Value
The stated face value of a bond or stock expressed as a dollar amount per share.

Pension Plan
A plan established and maintained by an organization in order to provide retirement income for the members of the organization.

Permanent Insurance
Life insurance that provides lifetime coverage to the policy owner as long as premiums are paid.

Policy Loan
A loan made by a life insurance company from its general funds to a policyholder, using the cash value of a policy as security against the loan.

Policy
A contract of insurance.

Policyholder
The person who owns an insurance policy.

Portability
The ability to transfer pension rights and credits from an employer upon transfer of job.

Power of Attorney (POA)
The legal appointment by an individual allowing another to make decisions on their behalf.

Preferred Rates
Non-smoking rates that reduce the cost of life insurance to an individual.

Premium
Payments made by the policy owner for the insurance policy to keep it valid.

Present Value
Value of an investment right now as opposed to sometime in the future.
Principal

The amount owed to a lender for a loan, not including interest expense.

Probate
The process of attaining judicial certification and confirmation of the validity of a will. Fees are levied by the courts based on assets contained and to be distributed within the will.

Property Insurance
Insurance providing financial protection against the loss of, or damage to, real and personal property caused by perils.

Prospectus
A document provided by distributors of securities providing information on the security for sale, management, operations, and financial information.

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R

Rate (interest)
The monetary return on top of the principal, specified in a contract.

Rated policy (Extra-Risk Policy)
An insurance policy issued at a higher premium rate to make up for the extra risk associated in the policy writing.

Registered Retirement Income Fund (RRIF)
Established to provide retirement income by the age of 69 from an RRSP.

Registered Retirement Savings Plan (RRSP)
A government program available to individuals with employment income to defer tax on a portion of their earning until a future point in time (usually retirement).

Reinstatement
The restoration of a lapsed life insurance policy.

Renewable Term Insurance
Term insurance policy that can be renewed at the end of the policy by the policy holder without evidence of insurability.

Rescission
Termination of an insurance contract by the insurer on the grounds of material misstatement on the application for insurance.

Revocable Trust
A trust that may be terminated or revoked by its creator at any time.

Rider
A special policy provision that may be added to a policy to increase or decrease the benefits of the plan.

Right of Survivorship
At the death of one owner of a property/investment, that person's interest in the property is passed over to the surviving joint tenant(s).

Rule of 72
The rule that the number 72 divided by the rate of return of your investment equals the number of years it takes for your investment to double. e.g.: 72/6=12 Years.

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S

Segregated Fund
Similar in design to mutual funds, but issued by an insurance company. Unlike a mutual fund, segregated funds offer return guarantees at maturity or death to limit loss potential.

Self Directed RRSP
An RRSP plan in which you can hold any qualified investment.

Spousal Registered Retirement Savings Plan
An RRSP plan which is owned by the spouse of the person contributing to it, while the contributor receives the tax benefit.

Standard Risk
A person who is entitled to purchase insurance protection without extra rating or special restrictions based on company underwriting.

Stock Dividend
A stock ownership benefit paid to common and preferred shareholders where a dividend is paid in the form of additional stock, rather than cash.

Surrendered Policy
A policy terminated because of non-payment of premiums, for which there is a cash value or other non-forfeiture value available.

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T

Term
The length of time of a contract. At the expiry of the term the contract may generally be renewed for a further term and the rate renegotiated.

Term Insurance
A life insurance policy which only covers the insured within a specified period.

Testamentary Trust
A trust created through a will upon death.

Total Debt Service Ratio (TDS)
Equals the total cost of housing payments plus all other installment payments divided by the family's total gross income. 40% is a standard benchmark.

Trade Date
The date on which a trade is executed.

Trading
The process of buying and selling securities either on an exchange or over the counter.

Travel Accident Policy
An insurance contract covering only accidents while an insured person is traveling.

Trust
A legal instrument allowing one party (trustee) to control assets for the benefit of another (beneficiary).

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U V W X Y Z

Underwriting
The process by which an insurer determines whether or not, it is willing to accept an application for insurance.

Universal Life Insurance
A life insurance policy under which the policyholder may change the death benefit from time to time (with satisfactory evidence of insurability for increases) and vary the amount or timing of premium payments.

Variable Annuity
An annuity contract in which the amount of each periodic income payment may fluctuate.

Vest
A provision that a person after meeting certain requirements, retains the right to all or part of a benefit, even though the employee may leave their employer.

Waiver of Premium
A provision in some policies to relieve the insured of premium payments falling due during a period of continuous total disability.

Whole Life Insurance
A plan of insurance to run for the complete life of an individual.

Will
The legal document containing a person's wishes concerning the disposal of his or her property after death.

Yearly Renewable Term Insurance (YRT)
A form of term life insurance that may be renewed annually without evidence of insurability to a stated age.