W!SE Test Review
homeowners insurance
"A combination of both property and casualty coverages arising out of the ownership of a home. Coverage includes damage to the home, its contents, additional living expenses, and for the insured's personal liability. "
Beneficiary
(n) one who benefits from something; a person who is left money or other property in a will or the like
Pay Yourself First
A GOLDEN RULE of personal finance. Put a portion of your paycheck into savings/investments before any other spending.
Cashier's Check
A check issued by a bank and sold to you for personal payments to people who won't accept a personal check. It certifies that you have the money available.
FICO score
A credit rating developed by Fair Isaac & Company in the late 1950s, now widely used by lenders and employers. It consists of digit numbers ranging from 300-850.
Money Order
A form of check payment on which the financial institution prints the exact amount covered. Often used by people who do not have a checking account.
disability insurance
A form of health insurance that provides periodic payments to replace income when the insured is unable to work as a result of illness, injury, or disease-not as a result of a work-related accident or condition
Treasury Bill
A government bond that is repaid within three months to a year.
Collateralized Loan
A loan that is secured by collateral, properties or assets that are subject to seizure on default.
credit union
A nonprofit financial institution that is owned by its members and organized for their benefit.
Floater
A policy designed to cover property that floats, or moves, from location to location.
rule of 72
A quick way to figure out how long it will take to double your money at a given return rate . Interest rate divided by 72.
Disability Insurance
A type of insurance paid to an individual if he/she is injured and is unable to work for a specified length of time.
insurance benefit
Advantage, privilege, right, or financial reimbursement
NASDAQ
America's largest electronic stock market. Many technology stocks such as Apple, Microsoft and Yahoo are traded on this stock exchange
face value
Amount of principal due at the maturity date of the bond
APR
Annual percentage rate; the annual rate of interest that is charged for using credit
3 C's of Credit
Character(credit history), Capacity(ability to repay), Capital(assets)
truth in lending
Credit legislation that is federal they have to tell you the truth about their lending. Have to tell the whole truth in lending practices.
comprehensive insurance
Damaged by anything other than a collision, insurance pays bill, covers theft, damage caused by fire, explosions, natural disasters, or riots.
FICA
Federal Insurance Contributions Act; tax levied on both employers and employees to pay for Social Security and medicare
IRS Internal Revenue Service
Federal Tax Collectors
Claim
Formal request for payment, sent to the insurance company, to cover a loss
FDIC Federal Deposit Insurance Corp.
Insures your bank deposits up to $250,000
Term Insurance
Life insurance coverage for a specified period of time, less expensive than whole
US Bureau of Engraving and Printing
Make "paper" money
US Mint
Make US coins
Reconcile
Make your bank records compatible with your bank statements.
SEC Securities and Exchange Commission
Makes and Enforces rules for the stock market
Federal Reserve Bank
Monetary Policy (how much $ should be in circulation) Banker's Bank
U.S. Savings Bond
Obtainable through the U.S. government. Purchased at one-half the face value and will mature to full face value over a specified period of time. FDIC insured, moderate liquidity, moderate rate of return.
chapter 11
Section of Bankruptcy law that allows businesses to reorganize, continue functioning and pay creditors equitably according to a court-approved plan
Stock
Share of Ownership in a Corporation
Death Benefit
The actual amount paid to a beneficiary under a life insurance policy
Deductible
The amount an insured person must pay before the insurance company pays on a claim
Dow Jones
The average price of 30 selected industrial stocks, used as a measure of general market trends
Chapter 7
The chapter of the Bankruptcy Code providing for "liquidation" (i.e., the sale of a debtor's nonexempt property and the distribution of the proceeds to creditors).
Principal
The money originally invested or loaned, on which basis interest and returns are calculated
Risk
The possibility of a financial loss
Opportunity Cost
What you give up when you make one choice over another
Bounced check
a check written for an amount more than in your account
deductible
a clause in an insurance policy that relieves the insurer of responsibility to pay the initial loss up to a stated amount
Brokerage
a firm that provides you access to the stock markets
Commercial Bank
a for-profit institution that offers a full range of financial services
Inflation
a general increase in prices
Treasury Note
a government bond that is repaid within two to ten years
Garnishment
a legal process that allows part of your paycheck to be withheld for payment of a debt
Whole Insurance
a life insurance policy where the premium remains constant and builds a cash value invested by the insurer; a more expensive policy than term.
payday loans
a loan where a borrower gets a cash advances based on his paycheck
Consumer Credit Counseling Services
a nonprofit organizatioin that provides debt counseling for individuals with serious debt problems
Bull Market
a period of rising stock prices
insured
a person whose interests are protected by an insurance policy
Budget
a plan for making and spending money
Emergency Fund
a savings account you can access quickly to pay for unexpected expenses or emergencies, usually equal to 3-6 months of your salary
safe deposit box
a small, secure storage compartment that you can rent in a bank, usually for $100 a year or less.
Bear Market
a stock market with declining stock prices
installment credit
a type of closed credit where the loan is repaid with interest in equal periodic payments. Example: car loan, mortgage
Renters Insurance
a type of insurance that covers the loss of a tenant's personal property as a result of damage or theft
revolving credit
a type of open credit agreement that allows consumers to pay all or part of the outstanding balance on a loan or credit card.
Securities
all of the investments, including stocks, bonds, mutual funds, options, and commodities, that are traded
Bond
an IOU issued by a corporation or government that confirms you are lending the corporation or government money. Bonds pay interest regularly to lenders. At the end of the term of the bond, the borrower returns to the lender the face value of the bond (the amount the lender invested in the bond).
Rider
an add-on to an insurance policy
Claim
an established or recognized right
Variable Expense
an expense that changes from month to month
Want
an item that we desire but that is not essential to survival
Windfall Income
any type of additional income over expenses that is completely unexpected
scarcity
basic economic problem of economics that results from a combination of limited resources and unlimited wants
dividend
check paid to stockholders, usually quarterly, representing portion of corporate profits
comparison shopping
comparing products and prices in different stores before making a purchase
Assigned Risk Pool
consists of people who are unable to obtain automobile insurance due to poor driving or accident records and must obtain coverage at high rates through a state program that requires insurance companies to accept some of them.
Homeowners Insurance
coverage that provides protection for your residence and its associated financial risks
liquidity
ease with which an asset can be converted into cash
credit reporting agencies
equifax, transunion, and experian keep a record of consumer's credit transactions
Barter
exchange goods without involving money
Fixed Expense
expenses which stay basically the same from month to month, such as housing and transportation.
default
failure to pay back a loan
Mutual Fund
fund that pools the savings of many individuals and invests this money in a variety of stocks, bonds, and other financial assets
compound interest
interest earned on both the principal amount and any interest already earned
simple interest
interest paid on the principal alone
finance charge
is the total dollar amount you pay to use credit.
Beneficiary
n. person entitled to benefits or proceeds of an insurance policy or will
Benefit Period
period of time for which benefits are available.
insurance
promise of reimbursement in the case of loss
Insurance
protection against financial loss
Return on Invesment (ROI)
ratio of money gained or earned on an investment
collateral
something of value that a borrower lets the lender claim if a loan is not repaid
Need
something required or essential: food, shelter, transportation, education
diversification
spreading out investments to reduce risks
predatory lending
take advantage of ill-informed consumers through excessively high fees
Repossession
taking away property due to failure to repay the debt
net pay
the amount of a paycheck after the deductions are taken out
Cash Value
the amount of money a whole life policyholder would receive if the policy were surrendered before death or maturity
Deficit
the amount of money spent is more than the amount of money collected
co-pay
the amount of money the patient has to pay that the insurance company will not pay
lien
the legal claim of one person upon the property of another person to secure the payment of a debt or the satisfaction of an obligation.
time value of money
the principle that a dollar received today is worth more than a dollar received in the future
Capital Gain
the profit from the sale of an asset such as stocks, bonds, or real estate.
gross pay
the total amount you earn before any deductions are subtracted
S & P 500
tracks the prices of 500 different stocks as a measure of overall stock market performance
Annual Deductible
yearly fixed amount or percentage of an insurance claim that is the responsibility of the insured, and which the insurance company will deduct from the claim payment
