Financial Definitions, Financial Terms Defined, Financial Dictionary

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Financial Definitions U-Z

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The Pauper's Financial and Investment Dictionary provides you with a list of definitions on everything from A to Z in the world of financial planning.

Financial Definitions U-Z

A \| B \| C \| D \| E \| F \| G \| H \| I \| J \| K \| L \| M \| N \| O \| P \| Q \| R \| S \| T \| U \| V \| W \| X \| Y \| Z
Umbrella Policy	A type of liability insurance that provides coverage for large losses in excess of the limits of standard liability policies.
Underwrite	In insurance the insurance company will underwrite a policy in return for a premium. Example: A life insurance company will issue you or underwrite a $250,000 term policy for a set monthly premium that you would pay to the insurance company. The terms of the contract including premium amount and length would have been agreed upon before the policy was underwritten.
Underwriter	The company or person that assumes the risks in exchange for premiums.
Unearned Income	Income that is earned other than from wages, bonuses, tips, and any other working related income. Interest on a mutual fund or a bond owned is a type of unearned income.
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Variable Annuity	An annuity issued by an insurance company or an Investment company whose market value fluctuates according to the underlying investment vehicles funding the annuity. A variable annuity typically has a series of stock and bond mutual funds funding the separate account. The investment risk underlying the investments is retained by the annuitant, however the possibility of a greater return is expected.
Vesting	The right an employee eventually earns after a designated length of time. There is usually a vesting schedule set with Qualified Employer-Sponsored Retirement Plans. The contributions that an employer makes on behalf of its employees only becomes the employee’s money after a set period of time which is dependent upon the vesting schedule. The two types of vesting schedules are Graded & Cliff vesting.
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Whole Life Insurance	Whole life insurance is more than just life insurance. It also allows you to build up cash in your policy, kind of like a savings account. As long as you make your payments on the policy, your insurance stays in force until you die and then pays benefits to the person you name in the policy. One of the benefits of the policy is that you can take a loan out on it. One of the disadvantages is that whole life insurance is much more expensive than a regular life insurance policy (called term life). In most cases, you’re better off buying term life insurance and investing the rest of your money in another investment such as a retirement plan.
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Yield	Yield is the money you make on your investment.
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Zero Coupon Bond	A zero coupon bond is a bond that doesn’t make interest payments to you until the bond matures ("mature" meaning the date you can collect the interest). You can usually buy the bond at a deep discount, but you have to pay tax on the interest you’re earning each year even though you can’t collect the interest! So, it’s a good deal with a catch.

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