Financial Planning Glossary
A-E | F-I | M-R | S-W
> Accident benefit
It is an add-on to a life insurance policy, whereby the insured gets compensated if she is injured or killed in an accident
> Annuity
An investment instrument which, in return for a single payment or a series of payments, gives you regular returns.
> Asset allocation
The spreading of investments over a range of asset classes.
> Bond
A fixed income instrument wherein you lend money to a company, municipality, state or the Central Government.
> Capital gains
Profits earned from the sale of assets like equities, mutual funds and property.
> Cover
The amount of insurance one takes. The term cover is also used as another term for insurance itself.
> Endowment plan
An insurance plan that offers compensation upon death and provides returns if the insured survives the policy term.
> Equity
The ownership interest in a specific asset or group of assets.
> Fund Manager
The person responsible for managing the money you invest in a mutual fund.
> Financial planning
A structured process in which you make a detailed investment plan that helps you to meet your financial goals.
> Fixed deposit
A deposit placed in a bank, company or post office that offers you a fixed rate of return.
> Inflation
The increase in prices in the economy over a period of time, usually annualised for the purpose of comparison.
> Insured
The person who takes an insurance policy.
> Insurer
The insurance company
> Investments
Assets like stocks, mutual funds, fixed deposits, bonds, etc. that are acquired for the purpose of earning returns.
> Money-back plans
A variant of endowment plans where you get the total amount due to you in parts during the policy term instead of as a lump sum at the end of it.
> Nominee
The person nominated by the policyholder to receive the policy benefits in the event of her death.
> Pension plan
An insurance or mutual fund product where you make regular payments or a lump sum contribution which on retirement becomes a source of regular income.
> Policy
The legal document issued by the insurance company to the insured that contains the terms and conditions of the insurance contract.
> Policy holder
The person who buys the insurance policy. Also called the 'insured'.
> Policy term
The time period for which you are covered by the insurance contract.
> Premium
The payments made by the insured to the insurance company.
> Recurring deposit
A savings tool offered by banks and post offices where you deposit a fixed amount every month.
> Sum assured
The amount that the insurance policy covers you for. In the event of your death during the policy term, your nominee stands to receive at least this amount.
> Systematic Investment Plan (SIP)
A mutual fund scheme where you invest a fixed amount at regular intervals that is in turn invested in shares. If the share prices go down, you stand to get more units while if the share prices rise, you get lesser units.
> Term plan
A life insurance plan that covers you in the event of death during the policy term, but does not provide any returns should you survive the policy term.
> With-profit policy
An insurance plan that pays you the sum assured as well as a share in the profits of the insurance company if you survive the policy term.
> Without-profit policy
An insurance plan where you do not get a share in the profits of the insurance company if you survive the policy term.
> Whole life plan
An insurance plan where you are covered for your entire life and not just for the duration of the policy term.
