| Term |  | Definition |
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| Accidental Death & Dismemberment Insurance (AD&D) | | An insurance policy that pays an agreed-upon benefit should the insured suffer a qualified serious injury or death as the result of an accident. For more information, go to our Products section. |
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| Accidental Death Benefit | | A rider available on certain insurance policies that provides for an additional payment (up to $250,000) if the insured should die as the result of an accident. For more information, visit our Products section. |
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| Annual Percentage Yield (APY) | | A calculation of a savings account's annual rate of return that reflects compound interest. If, for example, a certificate of deposit offers a fixed annual rate of 4.0% with interest that is compounded monthly, the annual percentage yield would be 4.07%. |
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| Annuity | | An annuity is a financial contract with an insurance company that provides for payments of a specified amount of money at some future time, based on contributions made by the account's owner. This vehicle may offer tax-deferral on interest earned. For more information on this option, see our Products section. |
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| Ask Price | | Generally, the lowest price for which a stock may be purchased. |
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| Assets | | In accounting, the entries on a balance sheet that include all properties, as well as all claims against others. It is everything of value owned by the subject. |
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| Beneficiary | | The person or persons named as the recipient(s) of any benefits paid through a life insurance policy. |
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| Bid Price | | Generally, the highest price a stock will bring. |
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| Bond Fund | | A type of mutual fund based on bonds. |
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| Bonds | | When you buy bonds, you are, in effect, making a loan to the person or entity that is offering that bond for sale. Bonds pay an agreed-upon rate of interest over a specific period of time, providing the holder with a fixed income throughout its term. The bond "matures" at the end of its term, at which time the principal is returned to the investor.
There are three categories of bonds, based upon maturity timetables:
Bills - reach maturity in less than a year.
Notes - reach maturity in one to ten years' time.
Bonds - reach maturity in more than ten years.
There are many different types of bonds. These include:
Treasuries - Bonds, notes, and bills issued by the federal government.
Municipal Bonds - Bonds issued by states or cities, offering tax-free returns.
Corporate Bonds - Bonds issued by private companies and traded in a similar manner as stocks.
Mortgage & Asset-backed Securities - An investment bond backed by mortgages or non-real estate assets.
Zero Coupon Bonds - Bonds that pay interest at maturity, rather than through regular payments.
Foreign Government Bonds - Treasuries issued by non-U.S. national governments.
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| Budget | | A specific spending plan, broken down into relevant line items, for the purpose of calculating the balance between income and expenses over a designated period of time. |
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| Capital Gain | | The profit realized on the sale of an asset (a stock, for instance) that has increased in value since its purchase. For capital gains to be "realized," the stock must be sold. |
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| Cash Value | | A feature of Whole Life (or "permanent") life insurance policies. With many policies, cash value grows, tax-deferred, over time, provided the policy owner chooses to use his or her dividends to purchase additional life insurance. Cash value may be borrowed against for a variety of purposes. For more information, visit our Products section. |
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| Certificate Of Deposit (CD) | | A savings account that pays an agreed upon interest rate on an amount kept on deposit for a specific period of time. Typically the funds are "locked in" for the term of the certificate, and cannot be withdrawn without a substantial interest penalty. |
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| Commodity | | A physical asset (agricultural products, for example) that may be traded according to the terms of what is called a "futures contract," which specifies the point at which the commodity must be bought or sold. |
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| Common Stock | | A type of stock that pays dividends in varying amounts, depending on the company's profitability. |
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| Compound Interest | | Asset growth based on re-investment of earnings. It reflects the interest you earn on both your principal and any interest that has been added to that amount already. It works a bit like the "snowball" effect. In the beginning, your assets increase gradually. Over time, as you continue to re-invest your earnings, the growth becomes more rapid. The longer you allow that snowball to roll, the faster it will grow. |
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| Consumer Credit | | Consumer credit very often takes the form of "revolving" credit accounts (credit cards and lines of credit) the outstanding balance of which may be carried over from month to month, as per the specific terms of the credit agreement. |
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| Convertibility | | This is a feature of Term Life insurance that allows the insured to convert his or her policy to Whole Life coverage without having to answer any health questions or undergo a medical exam. Convertibility commonly carries an age limit. |
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