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| Head Of Household | | When filing their federal income tax form, individuals can choose "head of household" status if they provide more than half the financial support for one or more dependents living in their household |
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| Home Equity Loan | | A loan secured by the fair market value of your home minus the amount of your outstanding mortgage. In other words, this vehicle allows you to borrow against your home investment. |
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| Horizon (or Time Horizon) | | The length of time available for investing. For instance, if you are 35 years old and you're starting a fund for your retirement, your horizon is 30 years (assuming you plan to retire at age 65). |
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| Hybrid Fund | | A type of mutual fund that combines investments in two or more different kinds of instruments (such as stocks, bonds, money markets, etc.). |
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| Indemnity | | A legal agreement to compensate a person or entity for a certain kind of injury or loss. Life insurance is a type of indemnity. |
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| Index Fund | | A type of mutual fund comprised of investments that are distributed in a similar manner to major stock indexes, like the Dow Jones Industrial Average. The value of an index fund is tied to the performance of the index it is based upon. |
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| Individual Retirement Account (IRA) | | A personal retirement fund that you can establish with a bank, a brokerage house, or some other financial services provider. IRAs offer certain tax advantages. With a traditional IRA, you can contribute as much as $3,000 a year, and deduct your contributions from your federal income tax. The Roth IRA, while offering no tax deduction for contributions, allows tax-free withdrawals after you reach retirement age. Withdrawals may be made without penalty starting at age 59-1/2. |
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| Inflation Risk | | The greatest risk investors face over the long term. Investors who opt for conservative savings vehicles for long periods of time run the risk of losing asset value relative to the cost of living. In other words, the dollars you save today will have less buying power a decade from now. If your savings and investment choices do not provide enough growth opportunity to overcome this loss of buying power, your savings will gradually lose value. For more on this topic, see our Seminar entitled Smart Investing: Step By Step. |
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| International Fund | | A type of mutual fund comprised of non-U.S. investments. |
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| Joint Tax Return | | Federal tax return filing option for married couples that allows a combined income statement and combined deductions. |
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| Joint Will | | In estate planning, this is a will held in common between husband and wife. |
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| Junk Bond | | A bond that carries a low credit rating and offers a high yield, coupled with a high level of risk for the investor. |
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| Keogh Plan | | A pension plan for self-employed workers that allows for tax-deductible contributions, tax-deferred growth, and higher annual contribution limits than an IRA (up to $30,000 a year may be deposited tax-free). |
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| Legacy | | Assets and property left to others as directed by the provisions of a last will and testament. |
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| Lien | | To secure a loan, a lender may put a "lien" or claim on an asset owned by the borrower. If that asset is sold, the lender must be compensated for this claim. |
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| Life Insurance | | A contract that provides for a payment to a designated beneficiary upon the death of the insured. There are two main types of life insurance: Term Life and Whole Life (or "permanent"). Term Life is effective for a specific period of time, as determined by the original contract. In general, it provides coverage only (no cash value) and is renewable up to a certain age. Whole Life, on the other hand, offers lifetime coverage, plus cash value that grows, tax-deferred. While Term Life is initially less expensive than Whole Life, the premiums increase over time, whereas Whole Life premiums remain level. For more information, see our Products section. |
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| Limited Payment Whole Life | | A type of permanent life insurance policy that provides lifetime coverage with premiums that end after twenty years. For more information, see our Products section. |
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| Liquidity | | The ease with which an asset may be converted to cash without loss of value. |
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| Long Term Care Insurance | | This is a type of policy that provides for a benefit in the event of a prolonged illness or disability. These policies are often structured to defray the cost of residency at a long term care facility; some provide benefits for home care, as well. |
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| Long Term Risk | | The potential for loss of asset value faced by long-term investors. The biggest risk long-term investors face is that of inflation. When you opt for conservative savings and investment vehicles over a long period of time, you run the risk of losing asset value relative to the cost of living. In other words, the dollars you save today will have less buying power a decade from now. If your savings and investment choices do not provide enough growth opportunity to overcome this loss of buying power, your savings will gradually lose value. |
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