Life Insurance Terms

Investment Terms


Cash surrender value

The cash amount that is provided to the insurer in the event of voluntary termination of the policy before the death of the insured life.

Certificate of Insurance

A documentation that summarizes the specified benefits and principal provisions of the group contract in which the person is insured.


The demand by the insured/beneficiary for the benefit payments from the policy.

Claims examiner

The person who evaluates the claim and verifies if the claim is valid

Covered expenses

Health care expenses including specified hospital, medical and etc that are considered when calculating benefits due under the health insurance policy


Provision where the insured and the insurer share the covered expenses specified in the policy in a ratio. (the insurer reimburse the insured for 75% of covered expenses, the insured pays the 25%)

Collateral assignment

Assigns the life policy to a financial institution as a security in which the loan is repaid upon the death of the borrower

Contributory plan

A group plan where the employee contributes toward the premium cost. The employee deducts the employee's contribution from their salary.

Convertible policy

A type of life policy that can be changed for another life policy under certain conditions


A document that contain a set of promises that the law will enforce,

Critical illness insurance

A form of insurance that provides a lump-sum cash payment in the event of a contracting certain dreaded diseases (top four conditions: heart attack, cancer, stroke, heart bypass surgery)


Preferred shares or bonds that give the issuing corporation an option to repurchase, or "call" those securities at a stated price. These are also known as redeemable securities.

Canada Savings Bond

A bond issued each year by the federal government. These bonds can be cashed in at any time for their full face value.


Generally, the money or property used in a business. The term is also used to apply to cash in reserve, savings, or other property of value.

Capital cost allowance

A taxation term, equivalent to depreciation, that makes allowance for the wearing away of a fixed asset.

Capital loss

The loss that results when a capital asset is sold for less than its purchase price.

Capital stock

All ownership shares of a company, both common and preferred.


The total amount of all securities, including long-term debt, common and preferred stock, issued by a company.

Cash equivalent

Assets that can be quickly converted to cash. These include receivables, Treasury bills, short-term commercial paper and short-term municipal and corporate bonds and notes.


A document providing evidence of ownership of a security such as a stock or bond.

Closed-end fund

A fund company that issues a fixed number of shares. Its shares are not redeemable, but are bought and sold on stock exchanges or the over-the-counter market.

Commercial paper

A negotiable corporate promissory note with a term of a few days to a year. It is generally not secured by company assets.

Common stock

A security representing ownership of a corporation's assets. Voting rights are normally accorded to holders of common stock.


The process by which income is earned on income that has previously been earned. The end value of the investment includes both the original amount invested and the reinvested income.

Consumer price index

A statistical device that measures the change in the cost of living for consumers. It is used to illustrate the extent that prices have risen or the amount of inflation that has taken place.

Contractual plan

An arrangement whereby an investor contracts to purchase a given amount of a security by a certain date and agrees to make partial payments at specified intervals.


A security that can be exchanged for another. Bonds or preferred shares are often convertible into common shares of the same company.


A legal business entity created under federal or provincial statutes. Because the corporation is a separate entity from its owners, shareholders have no legal liability for its debts.

Coupon rate

The annual interest rate of a bond.

Current asset

An asset that could be converted into cash within 12 months.

Current liability

A liability that has to be paid within 12 months.

Current yield The annual rate of return that an investor purchasing a security at its market price would realize. This is the annual income from a security divided by the current price of the security. It is also known as the return on investment.


A financial institution, usually a bank or trust company, that holds a mutual fund's securities and cash in safekeeping.

For more information,
please contact us at

(647) 833-2782