GlossaryGuide

A viatical settlement allows you to invest in another person’s life insurance policy.  With a viatical settlement, you purchase the policy (or part of it) at a price that is less than the death benefit of the policy.  When the seller dies, you collect the death benefit. Your return depends upon the seller’s life expectancy… Continue reading VIATICAL SETTLEMENTS

These have changeable interest rates. Some variable-rate CDs feature a “multi-step” or “bonus rate” structure in which interest rates increase or decrease over time according to a pre-set schedule. Other variable-rate CDs pay interest rates that track the performance of a specified market index, such as the S&P 500 Index.

A variable life insurance policy is a contract between you and an insurance company. It is intended to meet certain insurance needs, investment goals, and tax planning objectives. It is a policy that pays a specified amount to your family or others (your beneficiaries) upon your death. It also has a cash value that varies… Continue reading VARIABLE LIFE INSURANCE

A “surrender charge” is a type of sales charge you must pay if you sell or withdraw money from a variable annuity during the “surrender period” – a set period of time that typically lasts six to eight years after you purchase the annuity.  Surrender charges will reduce the value and the return of your… Continue reading VARIABLE ANNUITY SURRENDER CHARGES

You may cancel your contract within a short period (usually lasting at least 10 days) of receiving it without a surrender charge. Upon cancellation, you will typically receive a refund of your purchase payments. The refund may be adjusted up or down to reflect the performance of your investment options. The length of the free… Continue reading VARIABLE ANNUITIES – FREE LOOK PERIOD

A variable annuity is a contract between you and an insurance company, under which you make a lump-sum payment or series of payments.  In return, the insurer agrees to make periodic payments to you beginning immediately or at some future date.  You can choose to invest your purchase payments in a range of investment options,… Continue reading VARIABLE ANNUITIES

A unit investment trust UIT is one of three basic types of investment companies. The other two types are open-end funds (usually mutual funds) and closed-end funds. Exchange-traded funds (ETFs) are generally structured as open-end funds, but can also be structured as UITs. A UIT invests the money raised from many investors in its one-time public offering in a generally fixed portfolio… Continue reading UNIT INVESTMENT TRUSTS (UITS)

Ultra-short bond funds are mutual funds that generally invest in fixed income securities with extremely short maturities, or time periods in which they become due for payment. Like other bond funds, ultra-short bond funds may invest in a wide range of securities, including corporate debt, government securities, mortgage-backed securities and other asset-backed securities.  Some investors don’t realize that there are material differences… Continue reading ULTRA-SHORT BOND FUNDS

An institution, usually a bank, designated by the issuer as the custodian of funds and official representative of bondholders.

Treasury securities—including Treasury bills, notes, and bonds—are debt obligations issued by the U.S. Department of the Treasury. Treasury securities are considered one of the safest investments because they are backed by the full faith and credit of the U.S. government.  The income from Treasury securities may be exempt from state and local taxes, but not… Continue reading TREASURY SECURITIES