Consumers: Short-term » Glossary

The surrender of a right or privilege which is known to exist, or might exist.

An optional extra benefit which may be attached to a life insurance policy by means of a rider. The rider provides that under certain conditions the policy will be kept in full force by the company without payment of premiums. It is most commonly used as a total and permanent disability benefit, but may be available under certain other conditions.

A provision in an insurance policy that allows payment of insurance premiums to be permanently or temporarily stopped in the event the policyholder becomes incapacitated.

A provision in, or attached to, a life insurance policy limiting or excluding the extra risk inherent in war. Sometimes the exclusion applies only to members of the armed forces, but it may also apply to all civilians. Sometimes it excludes death while war is going on, but it may exclude death only as a result of war.

By international agreement insurers do not undertake war risks.

A security entitling the holder to buy a proportionate amount of stock at some specified future date at a specified price, usually one higher than current market price. Warrants are traded as securities whose price reflects the value of the underlying stock. Corporations often bundle warrants with another class of security to enhance the marketability of the other class. Warrants are like call options, but with much longer time spans-sometimes years. And, warrants are offered by corporations, while exchange-traded call options are not issued by firms.

A clause in an insurance contract presenting a condition relating to the degree of risk, non-compliance with which invalidates the contract.

An international agreement specifying the liability of airline operators to their passengers and in respect of their baggage.

A market with few buyers and many sellers and a declining trend in prices.

A portfolio that includes a variety of securities so that the weight of any security is small. The risk of a well-diversified portfolio closely approximates the systematic risk of the overall market, and the unsystematic risk of each security has been diversified out of the portfolio.

See gross account.

A contract with both insurance and investment components: (1) It pays off a stated amount upon the death of the insured, and (2) it accumulates a cash value that the policyholder can redeem or borrow against.

Insurance that may be kept in force for a person’s entire life by paying one or more premiums. It is paid for in one of three different ways: _ ordinary life insurance (premiums are payable as long as the insured lives); _ limited payment life insurance (premiums are payable over a specified number of years); and _ single-premium life insurance (a lump sum amount paid at the inception of the insurance contract). with profits policy A term used to describe policies where the policyholders are eligible to participate in established surplus. Also a term used to describe the separate funds established in respect of such business.

This is a variation on term insurance. In the case of universal life policies the life office undertakes to pay the greater of the sum insured or investment account upon the death of the life insured whenever that may take place. For conventional policies the sum insured (including bonuses, if applicable) is paid out. The policyholder pays premiums, generally speaking, for the whole of the duration of the policy. There are, however, a number of variations on the premium payment term, for premiums can be arranged to cease at a defined age or be payable for a given term, with the cover remaining in force even when no further premiums are being paid. The most obvious use for a whole-life policy is to give long-term protection against the consequences of the death of a breadwinner to families or other dependants (e.g. for estate planning purposes).

It is a product that cannot be purchased by the retail market for direct investment. The wholesale investment product is used by a product provider (such as a multiple-manager manager) as one of this tools to construct a retail investment product.

A will is a written instrument containing directions for how the property of the person making the will (the "testator") shall pass on his or her death. The will must usually be executed in accordance with the laws of the country where the testator resides. These laws generally require that the will be signed by the testator and by at least two witnesses who have no interest in the property passing under it. The testator must state in the presence of the witnesses that the instrument is his or her will. He or she must also be "competent" (not insane, senile or mentally disabled) and not acting under duress or under the controlling influence of any person. A signed instrument purporting to be someone\'s will is not officially recognised until the court having jurisdiction over the instrument declares it to be a valid will after examining it and the circumstances surrounding its execution.

Indicates the active industry bets that made the largest/(smallest) contribution to active returns over the quarter.

Indicates the active style bets that made the largest/(smallest) contribution to active returns over the quarter.

A non-participating life insurance policy.

A working cover is a type of excess of loss reinsurance whereby individual claims in excess of specified deductibles are met by the reinsurer. It should be distinguished from a catastrophe cover whereby all claims arising out of a single event, once they exceed in total a specified deductible, are met by the reinsurer.

The World Equity Benchmark Series are similar to SPDRs. WEBS trade on the AMEX, and track the Morgan Stanley Capital International (MSCI) country indexes. WEBS are available for: Australia, Austria, Belgium, Canada, France, Germany, Hong Kong, Italy, Japan, Malaysia Free, Mexico, the Netherlands, Singapore, Spain, Sweden, Switzerland, and the United Kingdom.

The Worldwide Balanced Fund offers simultaneous exposure to both local and overseas markets and in doing this provides a balance between maximum capital growth and security in the medium to long term. The fund manager is mandated to invest between 40% and 60% of the portfolio in the South African market and the remainder in overseas assets. The fund comprises investments in equities, fixed-interest investments and cash. The equities are a mix of shares on the Johannesburg Securities Exchange and overseas exchanges.

The fund manager of the World Wide Equity Fund is mandated to invest between 40% and 60% of the portfolio in the South African market and the remainder in overseas assets. The fund comprises investment mainly in equities, but can also include fixed-interest investments and cash. The share component of the fund is a mixture of equities listed on the Johannesburg Securities Exchange and overseas stock exchanges.

These invest in South African and foreign markets. At least 15 percent of the assets should be held in South African markets at all times and at least 15 percent must be offshore at all times. These have similar mandates to those in the Domestic Asset Allocation category, except they are able to invest locally and offshore.

The Worldwide Property Fund is ideal if you wish to diversify into property investments with simultaneous exposure to both local and overseas markets as the fund manager is mandated to invest 50% of the portfolio in properties in South Africa and 50% in overseas assets. The fund comprises investments in commercial properties in South Africa and shares of overseas companies investing in commercial properties.

Unit trusts that invest in SA and foreign markets. A minimum of 15% must be held locally and globally at all times.

An investment consulting relationship for management of a client\'s funds by one or more money managers, that bills all fees and commissions in one comprehensive fee charged quarterly.

Premiums which an insurer is contractually entitled to receive from the insured in relation to contracts of insurance. These are premiums on contracts entered into during the accounting period and adjustments arising in the accounting period to premiums receivable in respect of contracts entered into in prior accounting periods.