Security First Insurance Group http://www.securityfirst.net Put Your Security First Thu, 01 Sep 2016 13:55:40 +0000 en-US hourly 1 https://wordpress.org/?v=4.4.11 Glossary http://www.securityfirst.net/glossary/ Thu, 15 Nov 2012 15:32:31 +0000 http://byvdemosite.com/sf/?p=430 Continue reading ]]>
A
Adjusted Gross Income (AGI)
An interim calculation in the computation of income tax liability. It is computed by subtracting certain allowable adjustments from gross income.
Administrator
A person appointed by the court to settle an estate when there is no will.
After-Tax Return
The return from an investment after the effects of taxes have been taken into account.
Aggressive Growth Fund
A mutual fund whose primary investment objective is substantial capital gains. The return and principal value of mutual funds fluctuate with changes in market conditions. Shares, when sold, may be worth more or less than their original cost. Investments seeking to achieve higher returns also involve a higher degree of risk. Mutual funds are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.
Alternative Minimum Tax
A method of calculating income tax that disallows certain deductions, credits, and exclusions. This was intended to ensure that individuals, trusts, and estates that benefit from tax preferences do not escape all federal income tax liability. People must calculate their taxes both ways and pay the greater of the two.
Annuity
An insurance-based contract that provides future payments at regular intervals in exchange for current premiums. Annuity contracts are usually purchased from banks, credit unions, brokerage firms, or insurance companies. Any guarantees are contingent on the claims-paying ability of the issuing company.
Asset
Anything owned that has monetary value.
Asset Allocation
The process of repositioning assets in a portfolio to maximize potential return for a particular level of risk. This process is usually done using the historical performance of the asset classes within sophisticated mathematical models. Asset allocation does not guarantee against loss; it is a method used to help manage investment risk.
Asset Class
A category of investments with similar characteristics.
Audit
The examination of the accounting and financial documents of a firm by an objective professional. The audit is done to determine the records’ accuracy, consistency, and conformity to legal and accounting principles.
B
Balanced Mutual Fund
A mutual fund whose objective is a balance of stocks and bonds. Balanced funds tend to be less volatile than stock-only funds. The return and principal value of mutual funds fluctuate with changes in market conditions. Shares, when sold, may be worth more or less than their original cost. Mutual funds are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.
Bear Market
When the stock market appears to be declining overall, it is said to be a bear market.
Beneficiary
A person named in a life insurance policy, annuity, will, trust, or other agreement to receive a financial benefit upon the death of the owner. A beneficiary can be an individual, company, organization, and so on.
Blue Chip Stock
The common stock of a company with a long history of profitability and consistent dividend payments.
Bond
A bond is evidence of a debt in which the issuer promises to pay the bondholders a specified amount of interest and to repay the principal at maturity. Bonds are usually issued in multiples of $1,000.
Book Value
The net value of a company’s assets, less its liabilities and the liquidation price of its preferred issues. The net asset value divided by the number of shares of common stock outstanding equals the book value per share, which may be higher or lower than the stock’s market value.
Bull Market
When the stock market appears to be advancing overall, it is said to be a bull market.
Buy-Sell Agreement
A buy-sell agreement is an arrangement between two or more parties that obligates one party to buy the business and another party to sell the business upon the death, disability, or retirement of one of the owners.
C
Capital Gain or Loss
The difference between the sales price and the purchase price of a capital asset. When that difference is positive, the difference is referred to as a capital gain. When the difference is negative, it is a capital loss.
Cash Alternatives
Short-term investments, such as U.S. Treasury securities, certificates of deposit, and money market fund shares, that can be readily converted into cash.
Cash Surrender Value
The amount that an insurance policyholder is entitled to receive when he or she discontinues coverage. Policyholders are usually able to borrow against the surrender value of a policy from the insurance company. Policy loans that are not repaid will reduce the policy’s death benefit and cash value by the amount of any outstanding loan balance plus interest.
CERTIFIED FINANCIAL PLANNER® Practitioner
A credential granted by the Certified Financial Planner Board of Standards, Inc. (Denver, CO) to individuals who complete a comprehensive curriculum in financial planning and ethics. CFP®, CERTIFIED FINANCIAL PLANNER® and federally registered CFP (with flame logo)® are certification marks owned by the Certified Financial Planner Board of Standards. These marks are awarded to individuals who successfully complete the CFP Board’s initial and ongoing certification.
Certified Public Accountant (CPA)
A professional license granted by a state board of accountancy to an individual who has passed the Uniform CPA Examination (administered by the American Institute of Certified Public Accountants) and has fulfilled that state’s educational and professional experience requirements for certification.
Charitable Lead Trust
A trust established for the benefit of a charitable organization. A grantor who places money, securities, property, and other assets in a charitable remainder trust can designate an income beneficiary, even if it is the grantor herself, to receive payment of a specified amount (at least annually) from the trust. You may also qualify for an income tax deduction on the estimated present value of the remainder interest that will eventually go to charity.
Charitable Remainder Trust
A trust established for the benefit of a charitable organization. A grantor who places money, securities, property, and other assets in a charitable remainder trust can designate an income beneficiary, even if it is the grantor herself, to receive payment of a specified amount (at least annually) from the trust. You may also qualify for an income tax deduction on the estimated present value of the remainder interest that will eventually go to charity.
Chartered Financial Consultant (ChFC)
A professional financial planning designation granted by The American College (Bryn Mawr, PA) to individuals who complete a comprehensive curriculum in financial planning. Prerequisites include passing a series of written examinations, meeting specified experience requirements and maintaining ethical standards. The curriculum encompasses wealth accumulation, risk management, income taxation, planning for retirement needs, investments, estate and succession planning.
Chartered Life Underwriter (CLU)
A professional designation granted by The American College to individuals who complete a comprehensive curriculum focused primarily on risk management. Prerequisites include passing a series of written examinations, meeting specified experience requirements, and maintaining ethical standards. The curriculum encompasses insurance and financial planning, income taxation, individual life insurance, life insurance law, estate and succession planning, and planning for business owners and professionals.
COBRA
The Consolidated Omnibus Budget Reconciliation Act is a federal law requiring employers with more than 20 employees to offer terminated or retired employees the opportunity to continue their health insurance coverage for 18 months at the employee’s expense. Coverage may be extended to the employee’s dependents for 36 months in the case of divorce or death of the employee.
Coinsurance or Co-Payment
The amount an insured person must pay for a covered medical and/or dental expense if his or her insurance doesn’t provide 100 percent coverage.
Commodities
The generic term for goods such as grains, foodstuffs, livestock, oils, and metals which are traded on national exchanges. These exchanges deal in both “spot” trading (for current delivery) and “futures” trading (for delivery in future months).
Common Stock
A unit of ownership in a corporation. Common stockholders participate in the corporation’s profits or losses by receiving dividends and by capital gains or losses in the stock’s share price.
Community Property
State laws vary, but generally all property acquired during a marriage — excluding property one spouse receives from a will, inheritance, or gift — is considered community property, and each partner is entitled to one half. This includes debt accumulated. There are currently nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
Compound Interest
Interest that is computed on the principal and on the accrued interest. Compound interest may be computed continuously, daily, monthly, quarterly, semiannually, or annually.
Consumer Price Index
The U.S. Department of Labor’s main indicator of inflation. The Consumer Price Index is calculated each month from the cost of some 400 retail items in urban areas throughout the United States.
D
Deduction
An amount that can be subtracted from gross income, from a gross estate, or from a gift, thereby lowering the amount on which tax is assessed.
Defined Benefit Plan
A qualified retirement plan under which a retiring employee will receive a guaranteed retirement fund, usually payable in installments. Annual contributions may be made to the plan by the employer at the level needed to fund the benefit. The annual contributions are limited to a specified amount, indexed to inflation.
Defined Contribution Plan
A retirement plan under which the annual contributions made by the employer or employee are generally stated as a fixed percentage of the employee’s compensation or company profits. The amount of retirement benefits is not guaranteed; rather, it depends upon the investment performance of the employee’s account.
Diversification
Investing in different companies, industries, or asset classes in an attempt to limit overall risk. Of course, diversification does not guarantee against loss; it is a method used to help manage investment risk. Diversification may also mean the participation of a large corporation in a wide range of business activities.
Dividend
A pro rata portion of earnings usually distributed in cash by a corporation to its stockholders. In preferred stock, dividends are usually fixed; with common shares, dividends may vary with the fortunes of the company.
Dollar Cost Averaging
A system of investing in which the investor buys a fixed dollar amount of securities at regular intervals. The investor thus buys more shares when the price is low and fewer shares when the price rises, and the average cost per share is lower than the average price per share. Dollar cost averaging does not ensure a profit or prevent a loss. Such plans involve continuous investments in securities regardless of fluctuating prices. You should consider your financial ability to continue making purchases during periods of low and high price levels. However, this can be an effective way for investors to accumulate shares to help meet long-term goals.
E
Efficient Frontier
A statistical result from the analysis of the risk and return for a given set of assets that indicates the balance of assets that may, under certain assumptions, achieve the best return for a given level of risk.
Employer-Sponsored Retirement Plan
A tax-favored retirement plan that is sponsored by an employer. Among the more common employer-sponsored retirement plans are 401(k) plans, 403(b) plans, simplified employee pension plans, and profit-sharing plans.
Enrolled Agent (EA)
An enrolled agent is a person who has passed the appropriate examination in order to represent taxpayers before the Internal Revenue Service. Enrolled agents, like attorneys and certified public accountants, are unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can represent clients before.
Equity
The value of a person’s ownership in real property or securities; the market value of a property or business, less all claims and liens against it.
ERISA
The Employee Retirement Income Security Act is a federal law covering all aspects of employee retirement plans. If employers provide plans, they must be adequately funded and provide for vesting, survivor’s rights, and disclosures.
ESOP (employee stock ownership plan)
A defined contribution retirement plan in which company contributions must be invested primarily in qualifying employer securities.
Estate Conservation
Activities coordinated to provide for the orderly and cost-effective distribution of an individual’s assets at the time of his or her death. Estate conservation often includes the use of wills and trusts.
Estate Tax
Upon the death of a decedent, federal and state governments impose taxes on the value of the estate left to others (with limitations).
Executive Bonus Plan
The employer pays for a benefit that is owned by the executive. The bonus could take the form of cash, automobiles, life insurance, or other items of value to the executive.
Executor
A person named by the probate courts or the will to carry out the directions and requests of the decedent.
F
Federal Income Tax Bracket
The range of taxable income that is taxable at a certain rate. Currently, there are six federal income tax brackets: 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, and 35 percent.
Fixed Income
Income from investments, such as CDs, Social Security benefits, pension benefits, some annuities, or most bonds, that is the same every month.
401(k) Plan
A defined contribution plan that may be established by a company for retirement. Employees may allocate a portion of their salaries into this plan, and contributions are excluded from their income for tax purposes (with limitations). Contributions and earnings will compound tax deferred. Withdrawals from a 401(k) plan are taxed as ordinary income, and may be subject to an additional 10 percent federal tax penalty if withdrawn prior to age 59½.
403(b) Plan
A defined contribution plan that may be established by a nonprofit organization or school for retirement. Employees may allocate a portion of their salaries into this plan, and contributions are excluded from their income for tax purposes (with limitations). Contributions and earnings will compound tax deferred. Withdrawals from a 403(b) plan are taxed as ordinary income, and may be subject to an additional 10 percent federal tax penalty if withdrawn prior to age 59½.
Fundamental Analysis
An approach to the stock market in which specific factors – such as the price-to-earnings ratio, yield, or return on equity – are used to determine what stock may be favorable for investment.
G
Gift Taxes
A federal tax levied on the transfer of property as a gift. This tax is paid by the donor.Currently, the first $13,000 a year from a donor to each recipient is exempt from tax. Most states also impose a gift tax. The gift tax exemption is indexed for inflation.
H
Holographic Will
A will entirely in the handwriting of the testator. Without witnesses, holographic wills are valid and enforceable only in some states.
I
Individual Retirement Account (IRA)
Contributions to a traditional IRA are deductible from earned income in the calculation of federal and state income taxes if the taxpayer meets certain requirements. The earnings accumulate tax deferred until withdrawn, and then the entire withdrawal is taxed as ordinary income. Individuals not eligible to make deductible contributions may make nondeductible contributions, the earnings on which would be tax deferred.
Inflation
An increase in the price of products and services over time. The government’s main measure of inflation is the Consumer Price Index.
Intestate
A person who dies without leaving a valid will. State law then determines who inherits the property or serves as guardian for any minor children.
Investment Category
A broad class of assets with similar characteristics. The five investment categories include cash alternatives, fixed principal, equity, debt, and tangibles.
Irrevocable Trust
A trust that may not be modified or terminated by the trustor after its creation.
J
Joint and Survivor Annuity
Most pension plans must offer this form of pension plan payout that pays over the life of the retiree and his or her spouse after the retiree dies. The retiree and his or her spouse must specifically choose not to accept this payment form.
Joint Tenancy
Co-ownership of property by two or more people in which the survivor(s) automatically assumes ownership of a decedent’s interest.
Jointly Held Property
Property owned by two or more persons under joint tenancy, tenancy in common, or, in some states, community property.
L
Liability
Any claim against the assets of a person or corporation: accounts payable, wages, and salaries payable, dividends declared payable, accrued taxes payable, and fixed or long-term obligations such as mortgages, debentures, and bank loans.
Limited Partnership
Limited partnerships pool the money of investors to develop or purchase income-producing properties. When the partnership subsequently receives income from these properties, it passes the income on to its investors as dividend payments. Limited Partnerships are subject to special risks such as illiquidity and those risks inherent in the underlying investments. There are no assurances that the stated investment objectives will be reached. At redemption, the investor may receive back less than the original investment. Individuals must meet specific suitability standards. These standards, along with the risks and other information concerning the partnership, are set forth in the prospectus, which can be obtained from your financial professional. Please consider the investment objectives, risks, charges, and expenses carefully before investing. Be sure to read the prospectus carefully before deciding whether to invest.
Liquidity
How quickly and easily an asset or security can be converted into cash.
Living Trust
A trust created by a person during his or her lifetime.
Lump-Sum Distribution
The disbursement of the entire value of an employer-sponsored retirement plan, pension plan, annuity, or similar account to the account owner or beneficiary. Lump-sum distributions may be rolled over into another tax-deferred account.
M
Marginal Tax Rate
The amount of tax paid on an additional dollar of income. As income rises, so does the tax rate.
Marital Deduction
A provision of the tax codes that allows all assets of a deceased spouse to pass to the surviving spouse free of estate taxes. This provision is also referred to as the “unlimited marital deduction.” The marital deduction may not apply in the case of noncitizens.
Money Market Fund
A mutual fund that specializes in investing in short-term securities and tries to maintain a constant net asset value of $1. Money-market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any government agency. Although money market funds seek to preserve the value of your investment at $1 per share, it is possible to lose money when investing in a money market fund.
Municipal Bond
A debt security issued by municipalities. The income from municipal bonds is usually exempt from federal income taxes. It may also be exempt from state income taxes in the state in which the municipal bond is issued. Some municipal bond interest could be subject to the federal alternative minimum tax. If you sell a municipal bond at a profit, you could incur capital gains taxes. The principal value of bonds fluctuates with market conditions. Bonds sold prior to maturity may be worth more or less than their original cost.
Municipal Bond Fund
A mutual fund that specializes in investing in municipal bonds. Bond funds are subject to the same inflation, interest-rate, and credit risks associated with their underlying bonds. As interest rates rise, bond prices typically fall, which can adversely affect a bond fund’s performance. The principal value of bond funds fluctuates with changes in market conditions. Shares, when sold or redeemed, may be worth more or less than their original cost. Mutual funds are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.
Mutual Fund
A collection of stocks, bonds, or other securities purchased and managed by an investment company with funds from a group of investors. The return and principal value of mutual funds fluctuate with changes in market conditions. Shares when sold, or redeemed, may be worth more or less than their original cost. Mutual funds are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.
N
Net Asset Value
The per-share value of a mutual fund’s current holdings. The net asset value is calculated by dividing the net market value of the fund’s assets by the number of outstanding shares.
P
Pooled Income Fund
A trust created by a charitable organization that combines the contributions of several donors and distributes income to those donors based on the earnings of the trust. The trust is managed by the charitable organization, and contributions are partially deductible for income tax purposes.
Portfolio
All the investments held by an individual or a mutual fund.
Preferred Stock
A class of stock with claim to a company’s earnings, before payment can be made on the common stock, and that is usually entitled to priority over common stock if the company liquidates. Generally, preferred stocks pay dividends at a fixed rate.
Prenuptial Agreement
A legal agreement arranged before marriage stating who owns property acquired before marriage and during marriage and how property will be divided in the event of divorce. ERISA benefits are not affected by prenuptial agreements.
Price/Earnings Ratio (P/E Ratio)
The market price of a stock divided by the company’s annual earnings per share. Because the P/E ratio is a widely regarded yardstick for investors, it often appears with stock price quotations.
Principal
In a security, the principal is the amount of money that is invested, excluding earnings. In a debt instrument such as a bond, it is the face amount.
Probate
The court-supervised process in which a decedent’s estate is settled and distributed.
Profit-Sharing Plan
An agreement under which employees share in the profits of their employer. The company makes annual contributions to the employees’ accounts. These funds usually accumulate tax deferred until the employee retires or leaves the company.
Prospectus
A document provided by investment companies to prospective investors. The prospectus gives information needed by investors to make informed decisions prior to investing in a specific mutual fund, variable annuity, or variable universal life insurance. The prospectus includes information on the minimum investment amount, the investment company’s objectives, past performance, risk level, sales charges, management fees, and any other expense information about the investment company, as well as a description of the services provided to investors in the investment company.
Q
Qualified Domestic Relations Order (QDRO)
At the time of divorce, this order would be issued by a state domestic relations court and would require that an employee’s ERISA retirement plan accrued benefits be divided between the employee and the spouse.
Qualified Retirement Plan
A pension, profit-sharing, or qualified savings plan that is established by an employer for the benefit of the employees. These plans must be established in conformity with IRS rules. Contributions accumulate tax deferred until withdrawn and are deductible to the employer as a current business expense.
R
Revocable Trust
A trust in which the creator reserves the right to modify or terminate the trust.
Risk
The chance that an investor will lose all or part of an investment.
Risk-Averse
Refers to the assumption that rational investors will choose the security with the least risk if they can maintain the same return. As the level of risk goes up, so must the expected return on the investment.
Rollover
A method by which an individual can transfer the assets from one retirement program to another without the recognition of income for tax purposes. The requirements for a rollover depend on the type of program from which the distribution is made and the type of program receiving the distribution.
Roth IRA
A nondeductible IRA that allows tax-free withdrawals when certain conditions are met. Income and contribution limits apply.
S
Security
Evidence of an investment, either in direct ownership (as with stocks), creditorship (as with bonds), or indirect ownership (as with options).
Self-Employed Retirement Plans
In the past, the terms “Keogh plan” and “H.R. 10 plan” were used to distinguish a retirement plan established by a self-employed individual from a plan established by a corporation or other entity. However, self-employed retirement plans are now generally referred to by the name of the particular type of plan used, such as SEP IRA, SIMPLE 401(k), or self-employed 401(k). The contribution amount is indexed annually for inflation.
Simplified Employee Pension Plan (SEP)
A type of plan under which the employer contributes to an employee’s IRA. Contributions may be made up to a certain limit and are immediately vested.
Single-Life Annuity
An insurance-based contract that provides future payments at regular intervals in exchange for current premiums. Generally used as a supplement to retirement income and pays over the life of one individual, usually the retiree, with no rights of payment to any survivor.
Split-Dollar Plan
An arrangement under which two parties (usually a corporation and employee) share the cost of a life insurance policy and split the proceeds.
Spousal IRA
An IRA designed for a couple when one spouse has no earned income. The maximum combined contribution that can be made each year to an IRA and a spousal IRA currently is $10,000 or 100 percent of earned income, whichever is less, for the 2012 tax year. The total may be split between the two IRAs as the couple wishes, provided that the contribution to either IRA does not exceed the maximum annual contribution limit ($5,000 for 2012).
T
Tax Credit
Tax credits, the most appealing type of tax deductions, are subtracted directly, dollar for dollar, from your income tax bill.
Tax Deferred
Interest, dividends, or capital gains that grow untaxed in certain accounts or plans until they are withdrawn.
Tax-Exempt Bonds
Under certain conditions, the interest from bonds issued by states, cities, and certain other government agencies is exempt from federal income taxes. In many states, the interest from tax-exempt bonds will also be exempt from state and local income taxes. If you sell a tax-exempt bond at a profit, you could incur capital gains taxes. Some tax-exempt bond interest could be subject to the federal alternative minimum tax. The principal value of bonds fluctuates with market conditions. Bonds sold prior to maturity may be worth more or less than their original cost.
Taxable Income
The amount of income used to compute tax liability. It is determined by subtracting adjustments, itemized deductions or the standard deduction, and personal exemptions from gross income.
Technical Analysis
An approach to investing in stocks in which a stock’s past performance is mapped onto charts. These charts are examined to find familiar patterns to use as an indicator of the stock’s future performance.
Tenancy in Common
A form of co-ownership. Upon the death of a co-owner, his or her interest passes to the designated beneficiaries and not to the surviving owner or owners.
Term Insurance
Term life insurance provides a death benefit if the insured dies. Term insurance does not accumulate cash value and ends after a certain number of years or at a certain age.
Testamentary Trust
A trust established by a will that takes effect upon death.
Testator
One who has made a will or who dies having left a will.
Total Return
The total of all earnings from a given investment, including dividends, interest, and any capital gain.
Trust
A legal entity created by an individual in which one person or institution holds the right to manage property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust – A trust established by a will that takes effect upon death; Living Trust – A trust created by a person during his or her lifetime; Revocable Trust – A trust in which the creator reserves the right to modify or terminate the trust; Irrevocable Trust – A trust that may not be modified or terminated by the trustor after its creation
Trustee
An individual or institution appointed to administer a trust for its beneficiaries.
Trustee-to-Trustee Transfer
A method of transferring retirement plan assets from one employer’s plan to another employer plan or to an IRA. One benefit of this method is that no federal income tax will be withheld by the trustee of the first plan.
U
Universal Life Insurance
A type of life insurance that combines a death benefit with a savings element that accumulates tax deferred at current interest rates, subject to change, but with a guaranteed minimum. Under a universal life insurance policy, the policyholder can increase or decrease his or her coverage, with limitations, without purchasing a new policy.Universal life is also referred to as “flexible premium” life insurance. Access to cash values through borrowing or partial surrenders can reduce the policy’s cash value and death benefit, increase the chance that the policy will lapse, and may result in a tax liability if the policy terminates before the death of the insured. Policy loans or withdrawals will reduce the policy’s cash value and death benefit. Additional out-of-pocket payments may be needed if actual dividends or investment returns decrease, if you withdraw policy values, if you take out a loan, or if current charges increase. There may be surrender charges at the time of surrender or withdrawal and are taxable if you withdraw more than your basis in the policy. Any guarantees are contingent on the claims-paying ability of the issuing company. The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased.
V
Variable Universal Life Insurance
A type of life insurance that combines a death benefit with an investment element that accumulates tax deferred. The account value can be allocated into a variety of investment subaccounts. The investment return and principal value of the variable subaccounts will fluctuate; thus, the policy’s account value, and possibly the death benefit, will be determined by the performance of the chosen subaccounts and is not guaranteed. Withdrawals may be subject to surrender charges and are taxable if the account owner withdraws more than his or her basis in the policy. Policy loans or withdrawals will reduce the policy’s cash value and death benefit and may require additional premium payments to keep the policy in force. There may also be additional fees and charges associated with a VUL policy. Any guarantees are contingent on the claims-paying ability of the issuing company. Variable universal life is sold by prospectus. Please consider the investment objectives, risks, charges, expenses, and your need for death-benefit coverage carefully before investing. The prospectuses, which contains this and other information about the variable universal life policy and the underlying investment options, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.
Volatility
The range of price swings of a security or market over time.
W
Welfare Benefit Plan
An employee benefit plan that provides such benefits as medical, sickness, accident, disability, death, or unemployment benefits.
Whole Life Insurance
A type of life insurance that offers a death benefit and also accumulates cash value tax deferred at fixed interest rates. Whole life insurance policies generally have a fixed annual premium that does not rise over the duration of the policy. Whole life insurance is also referred to as “ordinary” or “straight” life insurance. Access to cash values through borrowing or partial surrenders can reduce the policy’s cash value and death benefit, increase the chance that the policy will lapse, and may result in a tax liability if the policy terminates before the death of the insured. Policy loans or withdrawals will reduce the policy’s cash value and death benefit. Additional out-of-pocket payments may be needed if actual dividends or investment returns decrease, if you withdraw policy values, if you take out a loan, or if current charges increase. There may be surrender charges at the time of surrender or withdrawal and are taxable if you withdraw more than your basis in the policy. Any guarantees are contingent on the claims-paying ability of the issuing company. The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased.
Will
A legal document that declares a person’s wishes concerning the disposition of property, the guardianship of his or her children, and the administration of the estate after his or her death.
Y
Yield
Generally, the yield is the amount of current income provided by an investment. For stocks, the yield is calculated by dividing the total of the annual dividends by the current price. For bonds, the yield is calculated by dividing the annual interest by the current price. The yield is distinguished from the return, which includes price appreciation or depreciation.
Z
Zero-Coupon Bond
This type of bond makes no periodic interest payments but instead is sold at a steep discount from its face value. Because these bonds do not pay interest until maturity, their prices tend to be more volatile than bonds that pay interest regularly. Interest income is subject to ordinary income tax each year, even though the investor does not receive any income payments. Bonds sold prior to maturity may be worth more or less than their original cost.

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Life Insurance http://www.securityfirst.net/life-insurance/ Wed, 22 Aug 2012 20:18:37 +0000 http://byvdemosite.com/sf/?p=223 Continue reading ]]> life-insurance-title

Financial planning for the protection of your family is essential. It is never too late to begin taking the necessary steps to accomplish this goal. The following products are available to assist you:

• Term Life
• Universal Life
• Whole Life
• Variable Life*

* Securities offered through Questar Capital Corporation (QCC), Member Financial Industry Regulatory Authority (FINRA) www.finra.org, and Securities Investor Protection Corporation (SIPC) www.sipc.org.

Security First Financial Services LLC and Security First Insurance Group are separate and independent of Questar Capital Corporation.

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Dental/Vision Insurance http://www.securityfirst.net/dentalvision-insurance/ Wed, 22 Aug 2012 19:21:41 +0000 http://byvdemosite.com/sf/?p=230 Continue reading ]]> dentalvisiontitle

Quality dental and vision care are important for you and your family. Many health plans exclude this valuable coverage. Dental and vision coverage are available as a supplement to your current health plan.

We offer:

• Orthodontics
• Preventive and major dental services
• Discounted Vision Products
• Preventive Vision Care

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Medical Insurance http://www.securityfirst.net/medical-insurance/ Wed, 22 Aug 2012 19:20:47 +0000 http://byvdemosite.com/sf/?p=228 medical-insurance-title

Optional benefits enable you to design health coverage that meets the needs of you and your family. The following supplemental coverage is available:

• Hospital Indemnity
• Intensive Care
• Long Term Care

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Disability Insurance http://www.securityfirst.net/disability-insurance/ Wed, 22 Aug 2012 19:19:08 +0000 http://byvdemosite.com/sf/?p=225 disability-insurance-title

Protecting your biggest asset, your ability to earn a living, is the most important thing you can do to safeguard you and your family. We can help prevent financial disaster by offering:

• Short Term Disability
• Long Term Disability

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Do I need workers compensation insurance? http://www.securityfirst.net/do-i-need-workers-compensation-insurance/ Tue, 14 Aug 2012 18:20:08 +0000 http://byvdemosite.com/sf/?p=197 Continue reading ]]> Employers have a legal responsibility to their employees to make the workplace safe. However, accidents happen even when every reasonable safety measure has been taken.

To protect employers from lawsuits resulting from workplace accidents and to provide medical care and compensation for lost income to employees hurt in workplace accidents, in almost every state, businesses are required to buy workers compensation insurance. Workers compensation insurance covers workers injured on the job, whether they’re hurt on the workplace premises or elsewhere, or in auto accidents while on business. It also covers work-related illnesses.

Workers compensation provides payments to injured workers, without regard to who was at fault in the accident, for time lost from work and for medical and rehabilitiation services. It also provides death benefits to surviving spouses and dependents.

Each state has different laws governing the amount and duration of lost income benefits, the provision of medical and rehabilitation services and how the system is administered. For example, in most states there are regulations that cover whether the worker or employer can choose the doctor who treats the injuries and how disputes about benefits are resolved.

Workers compensation insurance must be bought as a separate policy. Although in-home business and businessowners policies (BOPs) are sold as package policies, they don’t include coverage for workers’ injuries.

Content used by permission from Insurance Information Institute

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Do I need a commercial auto insurance policy? http://www.securityfirst.net/do-i-need-a-commercial-auto-insurance-policy/ Tue, 14 Aug 2012 18:07:08 +0000 http://byvdemosite.com/sf/?p=195 Continue reading ]]> As a businessowner, you need the same kinds of insurance coverages for the car you use in your business as you do for a car used for personal travel — liability, collision and comprehensive, medical payments (known as personal injury protection in some states) and coverage for uninsured motorists. In fact, many business people use the same vehicle for both business and pleasure. If the vehicle is owned by the business, make sure the name of the business appears on the policy as the “principal insured” rather than your name. This will avoid possible confusion in the event that you need to file a claim or a claim is filed against you.

Whether you need to buy a business auto insurance policy will depend on the kind of driving you do. A good insurance agent will ask you many details about how you use vehicles in your business, who will be driving them and whether employees, if you have them, are likely to be driving their own cars for your business.

While the major coverages are the same, a business auto policy differs from a personal auto policy in many technical respects. Ask your insurance agent to explain all the differences and options.

If you have a personal umbrella liability policy, there’s generally an exclusion for business-related liability. Make sure you have sufficient auto liability coverage.

Content used by permission from Insurance Information Institute

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Personal Watercraft http://www.securityfirst.net/personal-watercraft/ Wed, 08 Aug 2012 18:02:02 +0000 http://byvdemosite.com/sf/?p=159 Continue reading ]]> Personal watercraft are not generally covered by homeowners or auto insurance, and where they are, the coverage limits can be fairly low. You may need to purchase a specifically designed policy in order to insure these vessels. The personal watercraft policy covers:

  • Bodily injury
  • Property damage
  • Guest passenger liability
  • Medical payments
  • Theft

Typical policies include deductibles of $250 for property damage, $500 for theft and $1,000 for medical payments, although these may vary from company to company.

Liability limits start at $15,000 and can be increased to $300,000. This coverage will provide financial protection if your personal watercraft is involved in an accident.

Most policies also include water sports liability, which covers risks associated with activities such as waterskiing.

Consider buying an umbrella policy which will provide more liability protection. One million dollars in extra coverage costs about $300 a year and would extend to your home and auto insurance policies.

If you have several personal watercraft, you may qualify for a multi-boat discount on your insurance. Additional coverage can also be purchased for trailers and other accessories.

Be sure to speak with your insurance agent or company representative about your specific needs.

Personal Watercraft Safety

Sea Doos, Wave Runners and other personal watercraft are fun and so easy to use that you can get a false sense of security; however, each year they cause thousands of serious injuries.

To safely enjoy your personal watercraft, the I.I.I. suggests the following:

  • Never follow directly behind another personal watercraft. Stay at least 100 yards behind the vessel in front, and no less than 50 yards to one side. Because these vessels can travel at a very high rate of speed, each rider must be able to react to sudden changes in order to avoid a collision. Eighty percent of all injuries and fatalities occur when two vessels collide with one another.
  • Don’t jump the wake of a passing boat. You could misjudge its speed and cause a collision. Or you might end up in the path of traffic coming from the other direction.
  • Stay alert! Be aware of what is going on around you. Steer clear of other watercraft, swimmers, divers, water skiers and fishermen.

Content provided by INSURANCE INFORMATION INSTITUTE

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Boat Insurance http://www.securityfirst.net/boat-insurance/ Wed, 08 Aug 2012 17:39:29 +0000 http://byvdemosite.com/sf/?p=153 Continue reading ]]> Most companies provide limited coverage for property damage for small boats such as canoes and small sail boats or small power boats with less than 25 mile per hour horse power under a homeowners or renters insurance policy. Coverage is usually about $1,000 or 10 percent of the home’s property value and generally includes the boat, motor and trailer combined. Liability coverage is typically not included–but it can be added as an endorsement to a homeowners policy. Check with your insurance representative to find out if your boat is covered and what the limits are.

Larger and faster boats such as yachts, and personal watercraft such as jet skis and wave runners require a separate boat insurance policy. The size, type and value of the craft and the water in which you use it factor into how much you will pay for insurance coverage.

For physical loss or damage, coverage includes the hull, machinery, fittings, furnishings and permanently attached equipment as part of either an actual cash value policy or on an agreed amount value basis. These policies also provide broader liability protection than a homeowners policy. But there are distinct differences between the two types of policies.

Actual Cash Value policies pay for replacement costs less depreciation at the time of the loss. In the event of a total loss, used boat pricing guides and other resources are used to determine the vessel’s approximate market value. Partial losses are settled by taking the total cost of the repair less a percentage for depreciation.

Agreed Amount Value basis policies mean that you and your insurer have agreed on the value of your vessel and in the event of a total loss you will be paid that amount. Agreed Amount Value policies also replace old items for new in the event of a partial loss, without any deduction for depreciation.
Physical damage exclusions might include normal wear and tear, damage from insects, mold, animals (such as sharks), zebra mussels, defective machinery or machinery damage.

Boat insurance also covers:

  • Bodily injury—for injuries caused to another person
  • Property damage—for damage caused to someone else’s property
  • Guest passenger liability—for any legal expenses incurred by someone using the boat with the owner’s permission
  • Medical payments—for injuries to the boat owner and other passengers
  • Theft

Most companies offer liability limits that start at $15,000 and can be increased to $300,000. Typical policies include deductibles of $250 for property damage, $500 for theft and $1000 for medical payments. Higher limits may be available. Additional coverage can be purchased for trailers and other accessories. Boat owners may also consider purchasing an umbrella liability policy which will provide additional protection for their boat, home and car.

Boaters should also inquire about special equipment kept on the boat, such as fishing gear, to make sure it is covered and verify that towing coverage is included in the policy.

Boat owners should also inquire about discounts for the following:

  • Diesel powered craft, which are less hazardous than gasoline powered boats as they are less likely to explode
  • Coast Guard approved fire extinguishers
  • Ship-to-shore radios
  • Two years of claims-free experience
  • Multi-policies with the same insurer, such as a car, home or umbrella policy
  • Safety education courses, such as those offered by the Coast Guard Auxiliary, U.S. Power Squadrons, or the American Red Cross.

Boat Safety

There are thousands of recreational boating accidents per year. Contributing factors to these accidents include traveling too fast for water or weather conditions, driving under the influence of drugs or alcohol, failing to follow boating rules and regulations, carelessness and inexperience.

To prevent boating accidents, we offer these safety suggestions:

Care and protection of vessel

  1. Check weather forecasts before heading out.
  2. Let someone know where you’re going and when you expect to return.
  3. Check engine, fuel, electrical and steering systems, especially for exhaust-system leaks.
  4. Carry one or more fire extinguishers, matched to the size and type of boat. Keep them readily accessible and in condition for immediate use.
  5. Equip the vessel with required navigation lights and with a whistle, horn or bell.
  6. Consider additional safety devices, such as a paddle or oars, a first-aid kit, a supply of fresh water, a tool kit and spare parts, a flashlight, flares and a radio.

Care and protection of crew and guests

  1. Make sure that every person on board the boat wears a life-jacket.
  2. Know and obey marine traffic laws, the “Rules-of-the-Road.” Learn various distress signals.
  3. Keep an alert lookout for other watercraft, swimmers, floating debris and shallow waters.
  4. Pay attention to loading. Don’t overload; distribute the load evenly; don’t stand up or shift weight suddenly in a small boat; and don’t permit riding on the bow, seatbacks or gunwales.
  5. Don’t operate a boat while under the influence of alcohol or drugs.

Skippers can obtain free advice and boating-safety courses from the U.S. Coast Guard Auxiliary. Upon request, the auxiliary will conduct a Courtesy Marine Examination (CME) on your boat, checking electrical and safety equipment and fuel hoses. Boats meeting safety standards are awarded the CME decal “Seal of Safety.”
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Understanding Your Insurance Deductible http://www.securityfirst.net/understanding-your-insurance-deductible/ Thu, 05 Jul 2012 20:40:26 +0000 http://byvdemosite.com/sf/?p=114 Continue reading ]]> Understanding the role deductibles play when insuring a car or a home is an important part of getting the most out of your insurance policy.

A deductible is basically the amount “deducted” from an insured loss. Deductibles have been an essential part of the insurance contract for many years and represent a sharing of the risk between the insurance company and the policyholder. When repairing your home or replacing personal possessions, the amount of the deductible would come out of your own pocket.

A deductible can be either a specific dollar amount or a percentage of the total amount of insurance on a policy. Generally speaking, the larger the deductible, the less a consumer pays in premiums for an insurance policy. Deductible amounts can be found on the declarations (or front) page of standard homeowners and auto insurance policies.

Here is how it works: if you have a $500 “dollar deductible,” that $500 would be deducted from your claim. So, if your insurance company has determined that you have an insured loss worth $10,000 you would receive a claims check for $9,500.

Percentage deductibles are calculated differently. They are based on a percentage of the home’s insured value. So if your house is insured for $100,000 and your insurance policy has a 2 percent deductible, $2,000 would be deducted from the amount you are reimbursed on a claim. In the event of the $10,000 insurance loss, you would be paid $8,000.

Deductibles in many parts of the country have been going up. In hurricane prone states, where there is a greater risk of a major catastrophe, special deductibles may apply for homeowners insurance claims when the cause of damage is attributable to a hurricane. These deductibles are generally higher and may take the form of a percentage of the policy limits.

Deductibles for property damage work differently than, for example, a typical health insurance policy where there a single annual deductible for the policy. With an auto or homeowners insurance policy, the deductible applies each time you file a claim. The one major exception to this is in Florida, where hurricane deductibles specifically are applied per season rather than for each storm.

Hurricane deductibles have helped to make more private insurance coverage available in coastal communities at a lower price. This means more choice for consumers. So, consumers who reside in states where competitive markets exist can often shop around for coverage and usually find that they have a selection of insurance policies to pick from that offer a variety of different premiums, coverages and deductibles.

Here are some other important things to know about deductibles:

Raising Your Deductible Can Save Money

One of the best ways to save money on a homeowners or auto insurance policy is to raise the deductible. For example, for auto insurance, increasing the dollar deductible from $200 to $500 can reduce collision and comprehensive coverage premium costs by 15 to 30 percent. Going to a $1,000 deductible can save you 40 percent or more. But, remember that if you have a loss, this amount will be deducted from your insurance claim and that you will be responsible for the difference.

Deductibles Differ by Company and by State

Insurance is state regulated. And insurance companies must follow strict state laws. This also applies to the way deductibles are incorporated into the language of a policy, and how they are implemented. In many states a range of deductibles can be found. So if you are shopping for insurance, you should always ask about deductibles when comparing policies. For homeowners or renters insurance policies, most insurers offer a minimum $500 dollar deductible. However, raising the deductible to $1,000 or more can save upwards of 20 percent on the cost of an insurance policy.

Deductibles Do Not Apply to Liability Claims

There are generally no deductibles for the liability portion of a homeowners or auto insurance policy. Instead, the deductibles apply to property damage. So, on in an auto policy, there is a deductible for the optional comprehensive or collision coverage, but not for the liability portion. And, in a homeowners policy, deductibles apply to damage to the structure of the house or personal possessions but not if a homeowner is sued or a medical claim is made by someone injured in the home.

Flood Insurance Offers a Range of Deductibles

Flooding is not covered by standard homeowners insurance policies but is available from the National Flood Insurance Program (NFIP) and from some private insurance companies. The NFIP offers separate policies for the structure of your home and for your personal possessions, along with a variety of deductibles. You can choose one deductible for the structure and another for the contents of your home. Mortgage companies, however, may require that your deductible be under a certain amount. Flood damage to a car is covered by the optional comprehensive portion of an auto insurance policy.

Percentage Deductibles Apply to Earthquakes, Hurricanes and Hail

  • Earthquakes: Deductibles for earthquake coverage can range anywhere from 2 percent to 20 percent of the replacement value of the structure. Insurers in states like Washington, Nevada and Utah, with higher than average risk of earthquakes, often set minimum deductibles at around 10 percent. In most cases, consumers can get higher deductibles to save money on earthquake premiums.

    California residents also can purchase earthquake insurance through the California Earthquake Authority (CEA). The standard CEA policy includes a deductible that is 15 percent of the replacement cost of the home. The basic policy covers only the house (other structures such as garages, pools, etc. are not covered). Personal possessions are covered up to $5,000 and “loss of use” expenses, the additional cost of living elsewhere while repairs are made to the home, are covered up to $1,500. Recognizing that some people want more comprehensive coverage, the CEA also offers a 10 percent deductible for other structures, personal items coverage up to $100,000 and $15,000 in “loss of use” coverage.

  • Hurricanes and Hail: There are two kinds of wind damage deductibles: hurricane deductibles, which apply to damage solely from hurricanes; and windstorm or wind/hail deductibles, which apply to any kind of wind damage. Whether a hurricane deductible applies to a claim depends on the specific “trigger” selected by the insurance company. These triggers vary by state and insurer and usually apply when the National Weather Service (NWS) officially names a tropical storm, declares a hurricane watch or warning, or defines a hurricane’s intensity in terms of wind speed. Due to these differences, homeowners should check their policies and speak to their agent or insurance company to learn exactly how their particular hurricane deductible works. In some states, policyholders have the option of paying a higher premium in return for a traditional dollar deductible. However, in high-risk coastal areas insurers may not offer this option, instead making the percentage deductible mandatory.
  • Hurricane Deductibles Are Not New: The first hurricane deductibles were introduced into policies over 20 years ago. After Hurricane Hugo hit South Carolina in 1989 and Hurricane Andrew hit Florida in 1992, insurers realized they were far more vulnerable to huge weather-related losses than they had previously thought. In order to be able to continue getting reinsurance (basically insurance for insurers), and thus continue to offer homeowners insurance in high-risk areas it became necessary to require policyholders to share some of the cost by including hurricane deductibles in policies.

Consider Percentage Deductibles When Purchasing a Home

When looking for a new home, it is important to consider the cost of insurance. Coastal properties and other locations at higher risk for a natural disaster may cost more to insure than other locations, and you must add to that a separate deductible for earthquake or hurricane damage. Remember, you will be paying for insurance the entire time you live in your home—if you are a prospective buyer and feel you cannot afford the insurance, then it may be time to consider a different home.

Article content provided by Insurance Information Institute

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