A trustee is a person who is appointed to act on a beneficiary’s behalf. A trustee may be an individual of legal age and a sound mind. A business may also be granted trusteeship.


The person responsible for managing the trust. The trustee may be any person of legal age and sound mind.


A qualified retirement plan for public school employees and non-profit organizations, also referred to as a 403(b).


Life insurance policy replacement to the detriment of the insured. Twisting is illegal.

Unauthorized Insurer

Unauthorized insurers are those who are nonadmitted, meaning they have not been approved or authorized to sell insurance in the state.


The underwriter is a broker-dealer in charge of selling securities. For mutual funds, the underwriter is the person or company in charge of distributing and selling the fund shares to the public.


The person who reviews the insurance application and decides if the applicant is acceptable and at what premium rate.


The process by which a life insurance company determines whether it can accept an application for life insurance, and if so, on what basis so that the proper premium is charged.

Underwriting Spread

The underwriting spread is the difference between the price the underwriter pays the issuer for the new shares and the public offering price.  The underwriting spread is also known as the load or sales charge.

Unearned Income

Unearned income is investment income such as interest, dividends, and capital gains.

Unfair Claims Settlement Practices

Most states have adopted similar laws related to unfair claims settlement practices. These practices apply to both the insured and the insurer.

Unfair Discrimination

Unfair discrimination happens when similar risks are treated differently and premiums are based not on relative risk but on factors like race. State laws will address unfair discrimination related to insurance. For example, in some states, car insurance premiums cannot be based on gender. In those states to base car insurance premiums on gender would be a form of unfair discrimination.

Unfair Trade Practices

Most states have adopted similar laws related to unfair trade practices. These include unfair discrimination, misrepresentations related to the benefits, advantages, conditions, or terms of an insurance policy, misrepresentations related to dividends, and misleading statements related to the financial health of the insurer, amongst many others.

Uniform Gifts to Minors Act (UGMA)

UGMA is a law adopted in most states that permits a direct gift to a minor without a trust or guardianship. The donor appoints a custodian to manage the gift until the minor reaches the legal age. There are certain tax rules for these accounts. Some states are UGMA states while others are UTMA states (Uniform Transfer to Minors Act). The major differences between UGMA and UTMA states are the age at which the asset can belong to the minor and the type of investments that can be held.

Uniform Practice Code (UPC)

The Uniform Practice Code is the FINRA code designed to make uniform the customs, practices, and trading techniques among members in the securities business, such as regular way settlement.

Uniform Securities Act (USA)

The Uniform Securities Act is a state’s securities law. State securities laws are also called blue-sky laws. States have the option of adopting the legislation in its entirety or adapting it as needed.

Uniform Simultaneous Death Act

Commonly referred to as the common disaster clause this Act says that when the insured and the primary beneficiary die from the same accident it is assumed the insured died last.

Unilateral Contract

Insurance contracts are an example of a unilateral contract. This means they are one-sided. So long as the life insurance premium is paid, the insurance company promises to pay the beneficiary the death benefit if a certain event occurs (the insured dies). With a unilateral contract only the insurer makes a legally enforceable promise to pay covered claims.


A unit is the basis of the valuation of an annuity, similar to a share of a mutual fund. During the pay-in, the annuity is valued in accumulation units. During pay-out, the annuity is valued in annuity units.

Unit Investment Trust (UIT)

A unit investment trust is an investment company that invests in a fixed portfolio of securities. An investor will purchase units in the trust representing an undivided interest in the securities held.  A UIT has no management fee or board of directors.

Unit Refund Life Annuity

A unit refund life annuity is a life annuity that provides that a guaranteed number of units will be paid. If the annuitant dies before they are paid, the remaining units are paid to a beneficiary.

Universal Life

A type of life insurance that provides a guaranteed amount of life insurance (subject to adjustment by the insured), but with premiums and cash values that are based upon prevailing interest rates in the economy, also known as interest-sensitive whole life. Universal life insurance has a flexible premium.

Unsecured Bond

An unsecured bond is not secured by the pledge of some specific asset or assets of the issuing corporation. Unsecured bonds are also known as debentures. Unsecured bonds represent a higher level of risk to the investor than a secured bond so their nominal yields will be correspondingly higher.

Unsolicited Order

In an unsolicited order the client places the trade. Unsolicited orders are initiated by the client.

Unsystematic Risk

Unsystematic risk is stock-specific risk. Unsystematic risk is also called non-systematic risk. Unsystematic risk is reduced by diversification. Business risk, credit risk, legislative risk, political risk, and regulatory risk are some of the types of unsystematic risks.


The USA PATRIOT Act requires financial institutions to establish anti-money laundering programs, which at a minimum must include: the development of internal policies, procedures, and controls; designation of a compliance officer; an ongoing employee training program; and an independent audit function to test programs. It requires the filing of currency transaction reports and suspicious activity reports with FinCEN (the Financial Crimes Enforcement Network, a division of the Department of the Treasury).


To vacate means to cancel or annul a judgment or penalty.

Variable Annuity

A variable annuity is a type of annuity issued by life insurance companies.  Like fixed annuities, variable annuities guarantee monthly payments for life once the contract is annuitized. The insurance company accepts the mortality risk for the client. However, unlike fixed annuities, the variable annuity contract does not guarantee the amount of the annuity payment or the performance of the account. The annuitant accepts the investment risk, not the company.

Variable Annuity

A type of annuity contract in which benefits and cash/surrender values vary in accordance with the investment experience of various types of securities (typically, shares in mutual funds) held by the insurer in the separate account. The rate of return in the separate account is variable. Variable annuities are considered to be securities. Agents (producers) marketing them must be registered with FINRA. Generally, producers will pass the Securities Industry Essentials Exam (SIE) and the Series 6 top-off to become registered with FINRA. Additionally, a life insurance license is needed. Variable annuities have tax-deferred earnings during the pay-in period. Most variable annuities are non-qualified, funded with after-tax dollars.

Variable Life

A form of life insurance, derived from whole life insurance, but without the guarantees, in which benefits and cash/surrender values vary in accordance with the investment experience of various types of securities held by the insurer in the separate account, on the same basis as variable annuities. Variable life is considered to be a securities product. Agents (producers) marketing them must have passed the SIE and either Series 6 or 7 and be registered with FINRA. In addition, a life insurance license is required. Variable life has a fixed (level) premium. The rate of return in the separate account is variable.

Variable Universal Life

A type of life insurance combining the features of both variable life and universal life. A variable universal life policy is the only life insurance policy that allows the insured to self-direct funds in the separate account. Variable universal life has a flexible premium.

Vatical Settlement Agreement

Viatical settlements involve the sale of an existing life insurance policy by a viator (person with a life-threatening or terminal illness) to a viatical settlement company in return for a cash payment that is a percentage of the policy´s death benefit.

Vertical Spread

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


Vesting refers to ownership. An employee vests immediately in their contributions into a qualified plan. They will vest in the employer’s contribution over a period of time. Some qualified plans require immediate vesting of employer contributions (SIMPLE), but many have a vesting schedule to encourage employee retention.


Ownership of contributions made into a qualified plan. A participant vests in their contributions immediately. When they vest in the employer contributions depends upon the type of plan and ERISA requirements.

Visible Supply

The visible supply is the list of new municipal offerings announced for sale within the next 30 days.


Volatility is the magnitude and frequency of price changes within the securities industry over a given period of time.


Volatility is the magnitude and frequency of price changes within the securities industry over a given period of time.

Voting Trust Certificate

A voting trust certificate is a certificate that is issued by the trust to the beneficial owners of the voting trust. It is a type of security that is considered liquid.

Waiting Period

A period of time where no benefits are paid. It acts like a deductible, keeping the cost of the waiver of period rider affordable.


A voluntary giving up of a legal, given right.

Waiver and Estoppel

If the underwriter approves an incomplete application the insurer is waiving their rights to contest a claim related to whatever was left blank (doctrine of waiver and estoppel).

Waiver of Premium Rider

The waiver of premium rider on a life insurance policy waives the premium in the event the owner of the policy becomes totally disabled, keeping the life insurance policy in force. When the insured meets the policy’s definition of total disability, a six-month waiting period begins. This waiting period acts like a deductible. If the insured satisfies the waiting period the insurer will return the premiums paid to the insured, and then waive the premiums going forward for as long as the insured is totally disabled.

War Clause

Relieves the insurer of liability, or reduces the liability, for loss caused by war.


A warrant is a stock purchase option similar to rights because it allows the holder to purchase stock at a predetermined price. Warrants are usually attached to bonds to make them easier to sell (sweeteners). Warrants are long-term options, expiring in up to 30 years.


A warranty is a guarantee of truth. Applicants cannot be asked to warranty their health.

Wash Sale

A wash sale occurs when the investor sells a security at a loss but has purchased substantially identical securities within a certain time period. The IRS will disallow a loss if the investor repurchases substantially identical securities within 30 days before or after the sale of the security in which the loss was claimed, for a total of 61 days.

Whole Life

A type of life insurance that provides a guaranteed death benefit at a guaranteed flat premium and that accumulates cash value that may be borrowed against.

Wilshire 5000

The Wilshire 5000 is the broadest U.S. index.

Withdrawal Plan

Some mutual funds will offer withdrawal plans to clients whose account balances meet a minimum requirement. With a withdrawal plan, the client requests the systematic withdrawal of his or her account periodically. Withdrawals may be based on a fixed dollar amount, a fixed number of shares, a fixed percentage, or a fixed period of time.  A withdrawal plan is different from an annuity in the fact that the client may outlive the payments.

Showing 951-1000 of 1010 flashcards