Consumers: Short-term » Glossary

The financial year in which premiums are entered into the accounting records irrespective of the attaching dates of years of risks for which the premiums are received.

The premium for a full year’s cover for the specified risk of occurrence. The term is used when calculating an additional premium in an endorsement for the unexpired period of the policy following a change in the nature or extent of the cover.

Term life insurance issued for consecutive one-year periods at increasing rates. The right to renew the insurance at the end of each year, without providing evidence of insurability, is contained in the policy. The premium rate is increased at each renewal as the age of the life insured increases.

Length of employment to determine benefit in a defined benefit pension scheme.

Measures the company\'s current dividend yield and yield over previous years. The yield on a security is the annual return on a security calculated as a percentage of its current market price. In the case of equities or shares, there is a distinction between earnings yield and dividend yield. The former is calculated using the net profits of the company, while the latter uses declared dividends. The dividend yield is normally less than the earnings yield because of retained profits. The percentage return on an investment usually expressed as an annual rate. The yield of a unit trust is the annual income expressed as a percentage of the selling (repurchase) price. The figure quoted is gross yield before tax.

The advantage gained by purchasing convertible securities instead of common stock, which equals the difference between the rates of return of the convertible security and the common shares.

Shows the relationship between bond yields and maturity lengths. A normal or positive yield curve signifies higher interest rates for long-term investment, while a negative or downward curve indicates higher short-term rates. Used to assess long-term performance and inflationary expectations.

The annual discount rate applied by South Africa's fixed-income market to future interest and redemption cash flows payable on a particular debt instrument in order to price the instrument.