Flashcards

GANs are issued in anticipation of receiving a grant from the federal government or one of its agencies. The municipal will use the grant funds when received to pay off the GANs.

The grantor is the person who establishes a trust. The grantor is also called the donor or settlor.

Gross domestic product is the value of goods and services produced within a country’s border during a given period of time (typically a year). GDP includes consumption, government purchases, investments, and the balance of trade (exports minus imports).

Gross income is income from all sources. For a business, gross income may be referred to as gross sales or gross revenue.

Gross margin is a business’s income (sales/revenue) minus the cost of goods sold. Gross margin is also called gross profit. To get gross margin as a percentage take gross margin divided by gross revenue.

Gross revenue is the total revenue of a business, it does not include investment income.

A health plan offered by an employer or employee organization that provides health coverage to employees and their families.

Life insurance provided for employees of a common employer or members of an association provided it is not formed for the purposes of buying insurance. The cost is usually lower than for individual policies, but choices among plans and benefit amounts may be limited. Under a group plan, the insurer issues a single master policy to the employer or association and certificates of insurance are issued to the individual insureds. Most group programs provide coverage on a term basis, but the group plan can be used for most types of life insurance and annuity products.

A growth fund is a type of diversified common stock fund that has capital appreciation as its primary goal. It invests in companies that reinvest most of their earnings for expansion, research, or development. The term also refers to growth income funds that invest in common stocks for both current income and long-term growth of capital and income.  Growth funds usually have very low yields.

GIR stands for guaranteed insurability rider. This rider allows the insured to purchase additional amounts of insurance regardless of health, at specific dates. If an option date is missed it is lost and cannot be made up. Additional dates may be added for marriage and/or the birth of a child. When buying additional coverage under the guaranteed insurability rider the premium is based upon the insured’s attained (current) age, not the original age when they purchased the policy.

A health insurance policy that must be issued no matter the applicant’s health.

A policy that must be renewed, up to a certain age or date, so long as the premium is paid. Rates may only be changed by class.

Established at the state level to support insurers and protect consumers in the event of insurer insolvency. Guaranty Associations are funded through assessments charged to admitted insurers.

A guardian is a fiduciary who manages the assets of a minor or an incompetent person. The guardian must be of legal age and sound mind.

A hazard is something that increases the risk. Hazards may be physical, moral, or morale hazards.

A policy that will pay for medical expenses or treatments. Health policies can offer many options and vary in their approaches to coverage. The term health insurance also includes all senior health products.

Health Reimbursement Arrangements (HRAs) are employer-funded group health plans from which employees are reimbursed tax-free for qualified medical expenses up to a fixed dollar amount per year. Unused amounts may be rolled over to be used in subsequent years. The employer funds and owns the arrangement. Health Reimbursement Arrangements are sometimes called Health Reimbursement Accounts.

A health savings account is a tax-advantaged account that an individual may fund to provide monies for future health expenses. To fund a health savings account (HSA) the person must have a high deductible health insurance plan on the first day of the last month of that tax year, December 1st. Contributions made into an HSA are tax deductible on a person’s federal return, even if the person does not itemize. The balance rolls from year to year, and the earnings are free from income taxes when used for qualified medical expenses. A person enrolled in Medicare is not eligible for an HSA.

A type of savings account that lets a person set aside money on a pre-tax basis to pay for qualified medical expenses. By using untaxed dollars in an HSA to pay for deductibles, copayments, coinsurance, and some other expenses, a person may be able to lower their out-of-pocket health care costs. HSA funds generally may not be used to pay premiums. A person may contribute to an HSA only if they have an HSA-eligible plan (sometimes called a High Deductible Health Plan (HDHP)) — generally a health plan (including a Marketplace plan) that only covers preventive services before the deductible. An HSA may earn interest or other earnings, which are not taxable. Banks, credit unions, and other financial institutions offer HSAs.

A hedge fund is a type of pooled investment that engages in aggressive investment strategies, such as shorting stock. Hedge funds are suitable for aggressive investors that meet financial requirements.

Hedging is a strategy used to offset investment risk. Options can be used to hedge both long and short stock positions. Limits and stops can also be used to hedge investment risk.

A plan with a higher deductible than a traditional insurance plan. The monthly premium is usually lower, but the insured will pay more health care costs themself before the insurance company starts to pay its share (also called the deductible). A high deductible plan can be combined with a health savings account (HSA), for a person to pay for certain medical expenses with money set aside tax-free in an HAS. HDHPs are commonly called an HSA-eligible plan.

The Health Insurance Portability and Accountability Act (HIPAA) lays out three rules for protecting patient health information, namely: the privacy rule, the security rule, and the breach notification rule.

An individual’s status once they have had 18 months of continuous creditable health coverage. To be HIPAA (Health Insurance Portability and Accountability Act) eligible, at least the last day of the creditable coverage must have been under a group health plan; the individual also must have used up any COBRA or state continuation coverage; they must not be eligible for Medicare or Medicaid; they must not have other health insurance; and they must apply for individual health insurance within 63 days of losing the prior creditable coverage. When an individual is buying individual health insurance, HIPAA eligibility gives a person greater protections than they would otherwise have under state law.

The holding period is the time period that an investment is owned.

Skilled or unskilled care provided in an individual’s home, typically on a part-time basis.

The home state of a broker-dealer or investment adviser is the state in which they maintain their principal place of business. The strictest rules that may be imposed on an investment adviser that is registered in more than one state are the rules of the firm’s home state.

Homeowners insurance is a combination of both property and casualty coverages arising out of the ownership of a home, its contents, additional living expenses, and for the insured’s personal liability. The homeowners’ coverage can be used in different formats to insure mobile homes and farms.

A horizontal spread is either the purchase and sale of two calls or two puts with different expiration months (same class, same strike).

Services to provide comfort and support for persons in the last stages of a terminal illness and their families.

Care in a hospital that usually doesn’t require an overnight stay.

Hot storage is a method of storing crypto that uses services connected to the internet to store cryptocurrency keys.

Broker/dealers may have higher ongoing margin requirements than FINRA rules require. These higher requirements are called house requirements.

The human life value approach looks at how much income the person is expected to generate over their life and determines a face value based on that amount.

Hypothecation is when the client pledges their margin securities as collateral for the loan.  Brokerage firms re-hypothecate clients’ securities to a bank to finance the margin accounts.

NASAA passed a model rule that allows for states to adopt a continuing education requirement for investment adviser representatives. The continuing education requirement includes 12 hours of CE to be completed annually, by December 31st. Of those 12 hours 6 hours must be in the area of Products and Practices, and 6 hours must be in the area of Ethics and Professional Responsibility (with 3 of those 6 specific to ethics).

An immediate annuity is an annuity contract that is purchased for a lump sum (single premium) and starts to pay out in monthly payments the month immediately following its purchase.

An immediate annuity is funded with a single premium. The monthly payments begin one month after funding.

An impairment rider, also known as an exclusion rider, is an attachment to an insurance policy that excludes or limits coverage for a specific health condition or pre-existing medical condition.

Impersonal investment advice is advice that does not purport to meet the needs of any specific client, but that is general in nature.

Implied authority refers to the actions of an agent (producer) that may extend beyond the rights and powers explicitly provided in the agency contract.

In-the-money is the term used to describe an option that can be exercised by the owner. In-the-money options have intrinsic value. A call is in-the-money when the market price is above the strike and a put is in-the-money when the market price is below the strike.

An incentive stock option is a type of stock option that a business may make available to its employees. An ISO has preferential tax treatment, if the stock purchased is held for a minimum of two years after the date of grant and one year after the date of exercise, profits are taxed at long-term rates. ISOs are also called qualified stock options.

An income bond is a bond issued by a corporation that is experiencing financial difficulties. The income bond will only pay interest if the board of directors believes the company can afford to. Income bonds are also called adjustment bonds. Income bonds trade flat, without accrued interest

An income fund is a type of mutual fund that seeks to provide a stable current income from investments by investing in securities that pay higher-than-average yields.

The income statement is a financial statement that shows the income and expenses of a business or an individual, over a period of time. The income statement is also called a profit and loss.

A provision that places a time limit – up to two years – on a life insurance company´s right to deny payment of a claim because of a material misrepresentation on your application.

Indemnity is the process by which loss responsibility is explicitly transferred within a contractual relationship. Without this, there’s no way for an insurance policy to establish that accountability – meaning there would be no way to enforce its provided protections.

An indenture is a formal agreement between an issuer of bonds and the bondholder. The indenture provides for the appointment of a trustee to act on behalf of the bondholders, in accordance with the Trust Indenture Act of 1939. The indenture will cover such considerations as the form of the bond, amount of the issue, property pledged (if not a debenture), protective covenants including any provision for a sinking fund, working capital, and current ratio, and redemptions rights or call privileges.

An index fund is one in which the portfolio of the fund mirrors the holdings of an index. It is a passive type of investment since it is not actively managed. Index funds have low management fees.