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

A

Absolute Liability

Provides financial protection for innocent victims of a wrongdoer, even if the wrongdoer has violated the terms of the insurance policy. A common example is a pedestrian injured by an insured vehicle owned and operated by a driver whose license is suspended. The insurer would be under strict (or absolute) obligation to pay the pedestrian's damages. The insurer would not, however, be obliged to pay for damage to the car. The policyholder would have to reimburse the insurer for its payment to the pedestrian.

Accidental Death & Dismemberment (AD&D)

AD&D pays a benefit for death, loss of or loss of use of limbs, loss of speech, loss of hearing or loss of sight as the direct result of an accidental cause.

Accident Benefits

This auto coverage provides compensation, regardless of fault, if you, your passengers, or pedestrians suffer injury or death in an automobile collision. Accident benefits coverage is compulsory in all provinces except Newfoundland and Labrador.

Actual Cash Value

The net market value of property, taking into account replacement cost, depreciation and obsolescence. The amount of depreciation depends on the condition of the property immediately before the damage occurred, the resale value and normal life expectancy.

Actuary

A person trained in mathematics and insurance who studies statistics to determine insurance policy rates, reserves and dividends. Actuaries are also responsible for company solvency.

Acute Medications

See Maintenance Medications.

Adjudication

The act of reviewing claims information and determining whether a claimant meets the policy requirements to receive benefits.

Additional Living Expenses (ALE)

If your home is unfit to live in as a result of a covered loss, or you are required to leave while repairs are being made, you may receive any necessary additional living expenses to maintain your usual standard of living.

Adjusted Cost Base

The book value of an investment adjusted for purchases, sales, maturities and income distributions.

Age Limits

Stipulated minimum and maximum ages below and above which the company will not accept applications or may not renew policies.

Agent

An individual licensed to sell financial products such as investments or insurance who places business exclusively with one insurance company. The agent is paid a commission by the insurer. The agent is the representative for either an individual or group policyholder.

Amount of Insurance

The maximum amount that could be paid in the event of loss with respect to specific policy coverage/section.

Annuity

A contract that provides an income for a specified period of time, such as a number of years or for life.

Annual Rate of Return

A percentage amount that measures the performance of a fund over any 12-month period. For example, an annual return of 6% at March 31, 2006 indicates an increase of six cents on the dollar for a fund starting at April 1, 2005 through to March 31, 2006.

Annualized Rate of Return

The average annual performance of an investment over a specified period, also known as compound rate of return. For example, the five-year annualized rate of return as of March 31, 2006 indicates the average annual performance compounded over April 1, 2001 to March 31, 2006.

Annuity

An investment contract providing the investor with a fixed payment at regular periods, usually monthly. Each payment comprises of a portion of capital and earned interest.

Appraisal

A document completed by a reputable person with some expertise and knowledge of an item, on which a value is placed on the item. For example, a jewellery appraisal completed by a licensed gemologist, or watercraft appraisal completed by a marine surveyor.

Appraisers

Our Staff Appraisers assess damages caused to your vehicle as a result of an accident. For example, after an auto accident, our Claims Service Advisor assigns an Appraiser to view the damages and determine if the vehicle is reparable. If it is reparable, our Appraiser and the auto body shop will agree on a price to complete the repairs. If the vehicle is a total loss, our Appraiser will negotiate a cash settlement directly with you.

Asset Allocation/Asset Mix

The distribution or split of the three basic investment assets (equities, bonds, and cash) in an investment portfolio.

Asset Allocation Fund

Investments in a combination of cash, bonds and equities. It is similar to a balanced fund, but is sometimes weighted heavier in one type of asset class.

Assets

Anything of value that is owned by an individual, corporation, or other business. Includes prepaid expenses and intangibles such as patents and goodwill, as well as land, buildings, raw materials, and finished goods.

Assuris

Formerly the Canadian Life and Health Insurance Compensation Corporation (CompCorp). Provides specified levels of protection against loss for investors due to the financial failure of a member company. The Co-operators is a member of Assuris.

B

Basic Dental Services

Generally include the following services:

  • Diagnostic - exams and x-rays
  • Preventative - teeth cleaning and fluoride application
  • Oral surgery - extraction of teeth
  • Restorations - fillings and stainless steel crowns
  • Prosthetic repair and reline - some carriers will include repair and relining of dentures under Basic services and some will include under Major services
  • Endodontics - treatment of the tooth pulp and roots
  • Periodontics - treatment of the soft tissue and bone surrounding the teeth.

Balanced Fund

The combination of bond and equity investments to help obtain the highest return using a lower- diversification strategy. Bond investments provide high interest income and safety of principal while equity investments offer the opportunity for dividends and long-term capital appreciation.

Basis Point

A measurement of fluctuation. One basis point is equal to 0.01%. One hundred basis points are equal to 1%.

Benchmark

A standard to which the performance of an investment can be compared.

Beneficiary

A person designated by the plan member who will receive the plan benefits if the plan member dies.

Beneficiary, Contingent

You may designate an alternative beneficiary to receive the benefits only if the primary beneficiary is not living

Beneficiary, Irrevocable

A beneficiary who may only be changed with the written consent of the beneficiary.

Beneficiary, Revocable

A beneficiary who may be changed at any time by the insured person, without the written consent of the beneficiary.

Benefits

The covered services available to group benefit plan members and their eligible dependents.

Benefit Plan

A list of specific benefits provided.

Best Doctors®

A service that provides employees and their families with access to technologies and medical opinions of world-class medical specialists when seriously ill or injured.

Bodily Injury

This coverage provides up to $200,000 if you are injured or killed through the fault of a motorist who has no insurance, or by an unidentified vehicle. You receive payment under this protection through the Uninsured Automobile coverage in your policy unless the Canadian province, territory, or U.S. state where you were injured has a special fund from which to claim. You will be reimbursed for the money you would otherwise be entitled to receive from the uninsured/unidentified motorist.

Boiler and Machinery Insurance

Coverage for damage arising out of the operation of pressure, mechanical, and electrical equipment. It covers loss of the boiler and machinery itself, damage to other property, and business interruption losses.

Bond

A fixed-interest financial asset issued by governments, companies, banks, public utilities and other large entities. Bonds pay the bearer a fixed amount at a specified end date.

Book Value

The original price paid to purchase an investment.

Bottom Up

An investment style where stock selection is based on recognizing favourable characteristics of individual companies rather than the economy and industries. See also Top Down.

Broker

An individual licensed to sell insurance who places business with a variety of insurance companies. The insurer pays the broker a commission that is part of the premium paid to the insurer by the policyholder. The broker is the policyholder's representative.

Business Interruption Insurance

Protection for a business owner against losses resulting from a temporary shutdown because of fire or other insured peril. The insurance provides reimbursement for lost net profits and necessary continuing expenses.

Business Life Insurance

Life insurance purchased by a business enterprise on the life of a member of the firm. It is often bought by partnerships to protect the surviving partners against loss caused by the death of a partner, or by a corporation to reimburse it for loss caused by the death of a key employee.

Business Use

Vehicles used for business purposes other than farming, including any driving done in the course of the client's occupation or for which direct or indirect compensation is received. It does not mean driving from home, or to and from place of employment.

Buy-Sell Agreement

An agreement made by the owners of a business to purchase the share of a disabled or deceased owner. The value of each owner's share of the business and the exact terms of the buying-and-selling process are established before death or the beginning of disability.

C

Canada Pension Plan (CPP)

A mandatory government savings plan for most working individuals. It is designed to replace 25% of the average income during retirement.

Canada Revenue Agency

Formerly Revenue Canada, this government agency is responsible for Canadian income tax regulations.

Canadian Fixed Income Fund

An investment fund that invests in corporate, government or other issuer bonds and debentures.

Capital Gains

The gains realized upon the distribution or disposition of certain types of assets. In a non-registered account, 50% of the amount is taxable as income when received.

Carrier

A commercial insurer, government agency or other organization that underwrites or administers programs that pay for health, life or other insurance services.

Cash Surrender Value

The amount available in cash upon voluntary termination of a life policy by its owner before it becomes payable by death or maturity.

Cash Value

The sum of money required to replace a damaged article with another of like kind and quality. The value of an article, with proper deduction for depreciation, wear and tear, and obsolescence.

Claim

A request to an insurer or reinsurer for payment of a loss that may come under the terms of an insurance contract.

Claims Service Advisor (CSA)

An individual appointed to investigate and settle your claim. He or she may be employed by our company or working on our behalf for an independent adjuster.

Coinsurance

An agreement where an insurer and group plan member commonly share the cost of eligible health and dental expenses, for example 80%: 20%. Coinsurance generally refers to the insurer's share of the cost.

Commercial Property Insurance

Insurance for businesses that provides coverage for things like fire and other extended coverage.

Commercial Vehicle

A vehicle used for carrying business goods or materials for either distribution, delivery, or use. Does not include farm trucks.

Common Stock or Equity

Common stock is equity or a share in a corporation. When you invest in a company’s stock, you’re buying a piece of the company including voting rights and a claim on profits.

Compound Interest

Interest paid on both the original investment and the re-invested interest; the interest earning interest.

Consultant

A person or firm specializing in the design, sale and service of employee benefit plans. Consultants are commonly paid by their clients on a fee for service basis but may also be paid on a commission basis. See Broker.

Consumer Price Index

Used to measure inflation, this is a measurement of the price of goods and services typically purchased by an urban family.

Contribution to Pension

While a group plan member is receiving long term disability benefits, the insurer will also make payments to a pension plan equal to the pre-disability payments made by the plan member and/or plan sponsor.

Contract

See Policy.

Conversion

An option for group plan members to convert to individual policies without providing health evidence.

Co-operative Fire and Casualty Company

The Co-operative Fire and Casualty Company (CF&CC) was incorporated on June 30, 1951. It was the first national co-operative fire insurer in Canada. The company's head office was located in Regina, Saskatchewan.

Co-operative Insurance Services (CIS)

Co-operative Insurance Services was incorporated on July 8, 1963 to act as a holding company for Co-operative Life and Co-op Fire and Casualty Company. When formed, it was owned by 33 Canadian co-operative, credit union, farm and labour organizations.

Co-operative Life Insurance Company

Co-operative Life Insurance Company (CLIC) was incorporated in Regina, Saskatchewan in 1945. It entered the Ontario market, and its agents were initially used by Co-operators Fidelity & Guarantee Company to sell its auto and general insurance.

Co-operative Union of Ontario

The Co-operative Union of Ontario (CUO) was founded in 1945 under the name Ontario Co-operative Union. It was created for the purpose of defending the legislative and tax rights of co-operatives, in response to the Government’s taxation of both them and credit unions.

Co-operators Fidelity and Guarantee Association

Co-operators Fidelity and Guarantee Association (CF&GA) was incorporated in February, 1946 as a company with guarantee capital stock to write bonding insurance on employees of credit unions and co-operatives. The Ontario Co-operative Union, and later the United Farmers Co-operative Company and the Ontario Credit Union League each subscribed for shares in April, 1946.

Co-operators General Insurance Company

Starting in the early 1980s, The Co-operators Group investigated the amalgamation of its two casualty companies, Co-operators Insurance Association (CIA) and Co-operative Fire and Casualty Company. On February 1, 1983, The Co-operators General Insurance Company was established.

Co-operators Insurance Association (CIA)

At the end of 1950, The Co-operators Fidelity & Guarantee Association was reorganized from a to a joint-stock company and renamed The Co-operators Insurance Association (CIA). CIA was created as an effort to provide stable control and additional capital to its predecessor, Co-operators Fidelity and Guarantee Association (CF&GA).

Co-operators Insurance Associations of Guelph (CIAG)

To prevent name confusion with another co-operative insurance organization, Co-operators Insurance Association (CIA), Co-operators Insurance Agency (CI Agency) and Co-operators Life Insurance Association Ltd, assumed the operating name CIAG for CIA-Guelph.

In 1975, the Board formally created CIAG Management Ltd. to facilitate the merger between the Regina and Ontario companies. The company acted as a holding company for the Ontario companies for the purposes of the merger.

Co-operators Life Insurance Association

Co-operators Life Insurance Association was created in 1959 by the Co-operators Insurance Association as a way to become a multi-line company and sell life insurance. The two companies became jointly known as Co-operators Insurance Association of Guelph in 1967, in an attempt to prevent confusion between similarly named insurance companies.

Co-ordination of Benefits (COB)

The COB guidelines are designed by the health insurance industry to eliminate duplicate payments and stipulate the sequence in which coverage will apply when a person is insured under two contracts.

Co-pay

Similar to coinsurance but refers to a group plan member's share of health expenses, usually used in relation to prescription drug benefits paid through a pay direct drug card. For example, in a 20% co-pay, the plan member pays 20% of the expense and the insurer pays 80%.

Cost of Living Adjustment (COLA)

An adjustment to long term disability (LTD) benefits according to the rise in the cost of living as measured by an index such as the consumer price index. COLA is an optional benefit that a group plan sponsor may choose to include in the LTD plan.

Cost Containment

Activities aimed at controlling or reducing benefit plan costs.

Coverage

The scope of the protection provided under a contract of insurance. Otherwise stated as an illness, injury, death, property loss, legal liability, or any other situation or loss for which an insurance company will pay benefits under a policy when such event occurs.

Critical Disease Benefit

With this group coverage, losses normally payable only due to accident are also payable when resulting from a specified critical disease. A lump sum benefit is also paid if the plan member becomes totally disabled as the result of a critical disease that was diagnosed while insured under the plan.

Critical Illness (CI) Insurance

Pays a lump sum benefit on the diagnosis of a specified critical illness, usually following a specified survival period such as 30 days. The benefit is intended to help offset the costs associated with surviving a critical illness. CI generally covers certain types of cancer, heart attack or stroke, plus a number of additional illnesses that vary from plan to plan.

D

Debenture

Jump to glossary termA long-term unsecured bond that is backed only by the general credit worthiness of the issuer.

Deductible

The amount you have to pay out-of-pocket for expenses before your insurance company will cover the remaining costs.

Deferred Annuity

An annuity under which income payments to the annuitant commence some time after the date it is purchased.

Deferred Profit Sharing Plan (DPSP)

An employer-sponsored registered savings plan that is based on company profit. This plan has some similar features of an RRSP.

Defined Benefit Plan

An employer-sponsored pension plan that defines the amount of benefit at retirement. The benefit is based on years of service, age and contribution rate. The employer assumes most of the .

Defined Contribution Plan

A money-purchase pension plan under which employer and employee contributions are fixed. The pension benefit is based on these contributions and the amount of interest earned. Employees assume most of the .

Dental Benefits

Usually part of an employee benefit plan, this generally covers basic dental services and could also cover major dental services and orthodontics.

Dependent

The spouse or child of a group plan member, as defined in the policy.

Dependent Life Insurance

Provides a life insurance benefit for a group plan member's spouse and dependent children.

Direct Compensation-Property Damage (DCPD)

Available in Ontario only, this is the portion of an auto policy that covers damage to your vehicle, its contents, equipment and loss of use if another vehicle causes damage to yours. There is no deductible unless you elected to have one for a reduction in your premium.

Direct Writer

An insurer that markets and sells insurance directly to its policyholders without the assistance of independent brokers.

Disability

A medically diagnosed condition that renders a group plan member totally disabled as defined in the policy.

Diversification

Spreading among a number of different investments to minimize the of market fluctuations. By investing in a variety of investment securities, losses of any one asset can be offset by gains on other assets. In other words, “Don’t put all your eggs in one basket”.

Dividend

A refund of part of the premium on participating insurance to reflect the difference between the premium charged and the combination of actual mortality, expense and investment experience. Such premiums are calculated to provide some margin over the anticipated cost of the insurance protection.

Dividend Earnings

Profits paid by a corporation to its shareholders. In an insurance policy, a dividend is a refund of an over payment of premiums.

Dollar-Cost Averaging

The technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. More shares are purchased when prices are low, and fewer shares when prices are high.

Dow Jones Industrial Average

Commonly known as the DJIA or “the Dow,” this index is a price-weighted average of 30 blue-chip stocks listed on the New York Stock Exchange and the NASDAQ. Created by Charles Dow in 1896, this is the oldest index in the world.

Driving Record

A driving record is based upon the number of years accident free and the number of years for which someone has held a valid operator's licence continuously for the type of vehicle or for which credit has been given because of an approved driver training course.

Drug Formulary

A restricted list of prescription medications covered under a managed drug plan.

Drug Plan

Eligible prescription medication covered as part of a group benefit plan.

E

EAFE

Refers to major economies of Europe, Australia and the Far East. Morgan Stanley Capital International (MSCI) maintains an index of EAFE stocks.

Early Intervention

Steps taken during a group plan sponsor's self-insured sick leave period that will help to minimize employee absenteeism.

Eligibility

The criteria for membership in a group benefits plan.

Eligibility Period

A specified length of time, usually 31 days, following the eligibility date during which an individual member of a particular group will remain eligible to apply for insurance under a group life or health insurance policy without evidence of insurability.

Eligible Expense

A benefit listed in a policy.

Elimination Period

The duration of time between the beginning of a disability and the start of the disability benefit payments.

Emergency Medical Travel Assistance

This service, included with some extended health care plans, provides travellers with 24-hour emergency medical assistance including: referral to local doctors, the location of hospitals, confirmation of coverage to the hospital and advance payment if required, maintaining contact with doctors and family, arranging for medical transfer home by air ambulance and providing legal referrals, consulate and embassy references and telephone assistance with interpreters.

Employee Assistance Program (EAP)

A program designed to help employees and their dependents resolve a broad range of personal problems that may affect job performance. Services may include psychosocial, financial and legal counselling.

Employee Benefit Plan

A plan established by an employer or employee organization, or both for the purpose of providing certain benefits such as life insurance, disability, accident, medical and dental benefits.

Employment Insurance (EI)

A government-sponsored program to provide workers with unemployment, maternity, parental and sickness benefits. The plan is funded by employer and employee contributions.

Endodontics

Dental treatment of the tooth pulp and roots.

Endorsement

A legal addition to an insurance policy that was not part of the original contract.

Enrolment

The process by which an employee and/or dependents register to become insured members of a group benefit plan.

Equities

Also known as stocks, equities represent partial ownership of a company.

Equity Fund

A type of fund that invests in the stock or equity of companies.

Ergonomic Assessment

The study of factors in the workplace and the application of this study to adapt equipment and other technology to more effectively accommodate human needs and abilities.

Explanation of Benefits (EOB)

A statement from the insurer sent to a group plan member giving details about a submitted claim. The EOB summarizes the charges submitted, the amount deducted, the amount allowed, the amount paid and the balance.

Extended Health Care

Coverage for an extensive list of medical services generally including: prescription drugs, home nursing, out of country emergency medical services, hospital room, paramedical practitioners, medical equipment, eye exams, ambulance, etc.

F

Facility Association (FA)

A mandatory, shared market-pooling arrangement that provides automobile insurance to individuals who are otherwise unable to voluntarily purchase such coverage from private insurers. All insurance companies share in the results of the pool according to their percentage of voluntary business written.

First Party

The person in whose name the policy is issued; technically the first person listed in the contract. Also known as the policyholder and named insured.

First Payer

Where insurance is provided under more than one policy, this is the insurer who pays first. See also Coordination of Benefits.

Fixed Income Fund

A fund with assets invested in preferred shares, bonds and mortgages.

Flexible Benefit Plan

A group benefit plan that allows the plan member to select the most desirable level of benefits. Selection is generally made on an annual or biennial basis.

Fraud

If you try to gain by deliberately lying about a claim to your insurer, you forfeit your right to payment for the whole claim. To keep costs down for honest policyholders, insurers prosecute those who make fraudulent claims.

Fully Insured Plan

A group benefit plan in which the insurer pays all claims and assumes all s in exchange for premium payment.

Fund Manager

A person who manages the assets of an investment fund.

G

Generic Drugs

Drugs manufactured by generic drug manufacturers after a patent expires on the brand name drug. Generic drugs contain the same active ingredients as the original brand name drug and are less expensive.

Global Fund

A type of fund that invests in equity or fixed income located anywhere in the world, including domestic.

Grace Period

A specified period that allows for payment of the premium after the premium is due and during which the policy remains in force.

Graduated Licensing

A stepped program for all drivers applying for their first driver's licence in Alberta, Nova Scotia, New Brunswick, Ontario, and Newfoundland and Labrador. The conditions and time frames associated with Graduated License vary provincially, but the objective is to allow drivers time and opportunity to gain experience and skills to operate a vehicle safely.

Grandfathering

A term used to signify that prior benefit levels will be continued for specified individuals when coverage transfers to a new insurer.

Gross Income

Refers to your income before taxes and expenses are deducted.

Gross Rate of Return

The rate of return earned by an investment before fees and deductions have been applied.

Gross Salary

Your regular earnings paid by your employer, generally excluding bonuses, commissions, dividends and overtime earnings.

Group Benefit Plan

Generally refers to an employer/association sponsored benefit plan providing coverage to a group of employees or association members.

Group Insurance

See Group Benefit Plan.

Growth Style

An investment style where investments are made in companies with a history of rapid growth in sales and earnings and have the potential for continued future growth.

Guaranteed Income Supplement (GIS)

A government program to provide extra retirement income to lower-income households.

Guaranteed Investment Account (GIA)

Certificates offered by trust companies, banks, and credit unions that guarantee a specified rate of interest for a certain period of time, generally one to five years.

Guaranteed Rate Option (GRO)

Like a GIC, money is invested for a fixed time period and a rate of interest is provided in return.

H

Hazard

A condition that increases the chance of loss occurring. See also Peril.

Health Evidence

This may be a questionnaire about one's health or could involve a medical examination by a physician, blood work, x-rays, etc. The insurer uses this information to approve or decline applications for all benefits where the plan does not have non-evidence limits or for late applicants, for excess insurance and optional life insurance.

Health Evidence Maximum

The maximum benefit that will be provided with approval of health evidence.

Health Spending Accounts

Group plan members allocate funds to be deposited to this account. During the plan year, plan members are reimbursed tax free for health care expenses. Eligible expenses include those allowable by a private health services plan as defined in the Income Tax Act that are not covered by other private or provincial health insurance plans.

Home Buyer’s Plan (HBP)

Used to encourage purchasing a home, the buyer may use funds from an RRSP for the down payment. The buyer must pay the amount back to the RRSP over a 15-year period.

Home Insurance

Property and general liability insurance available for homeowners, condo owners, and tenants. Also called Property insurance.

Home Nursing Care

The services of a professional nurse provided in the insured person's home.

I

Income Splitting

The process of spreading income among family members. Most often affects tax on investment income. It involves shifting income from a high tax rate breadwinner to a low or nil rate family member. In some cases, earned income can be split by employment of family members in a family business.

Indemnity

A benefit paid by an insurer for a loss covered under a policy.

Index

A statistical yardstick against which financial or economic performance is measured, such as the S&P TSX index and the S&P 500 index.

Index Funds

A type of fund designed to replicate a particular index, such as the S&P TSX.

Inflation

The overall increase in prices as measured by the Consumer Price Index (CPI).

Interest

The payment on a bond or fixed income security for the use of the funds.

International Fund

A type of fund that invests in non-domestic securities, either equity or fixed income.

Investment Management Fee (IMF)

The fee paid on funds in a group plan. Similar to a Management Expense Ratio (MER).

Interest Rate Options

Any safe-type of investment that offers a set interest rate for a specific time period.

J

Joint and Survivor Annuity

An annuity that is based on two lives. It will provide income for your lifetime and, upon your death, your spouse’s lifetime.

K

Key Person Coverage

A key person is an employee who may cause your company to suffer a financial loss if something happens to them. Key person coverage provides the financial means to allow the business to carry on in the event of a key employee’s death.

L

Legal Liability

A person’s responsibility under the law for the consequences of an illegal or negligent act.

Liability Insurance

The type of insurance that covers an insured for his legal liability for injuries or damage to others.

Life Annuity

A retirement benefit that provides regular income payments for the lifetime of the owner of the policy.

Lifecycle Funds

These funds are similar to balanced funds, but are designed to be very simple. The member invests in one suitable fund based on their target retirement date. The member’s asset mix becomes more conservative as target date approaches.

Life Income Fund (LIF)

A retirement benefit in which the owner must withdraw a minimum annual amount up to a maximum, as prescribed by pension legislation. In some provinces, the owner must use the balance of the funds to purchase a life annuity at age 80.

Lifelong Learning Plan (LLP)

Used to encourage continuous education, the participant may use funds from an RRSP to pay for expenses of ongoing education. The participant must pay the amount back to the RRSP over a 10-year period.

Limitations and Exclusions

Conditions or circumstances for which benefits are limited or not allowed.

Living Assistance Benefits

Advance of a partial life insurance payment to meet the expenses of terminally ill plan members who meet the conditions outlined in the policy.

Load

A fee paid for the purchase of a fund. A fund may be front-end (paid on purchase), back-end (paid on sale), no-load (no fee), or decreasing (fee lowers each year).

Locked In

Accumulated benefits that can only be used to purchase retirement income as specified by applicable pension legislation and cannot be withdrawn in cash.

Locked-In Retirement Account (LIRA)

A type of RRSP that is subject to pension legislation. These funds must be used to purchase a life annuity or transferred to a Life Income Fund (LIF) or Locked-in Retirement Income Fund (LRIF) by the end of the year in which the owner reaches age 71.

Locked-in Retirement Income Fund (LRIF)

Like a Life Income Fund (LIF), has a minimum and a maximum payout level, however, the purchase of an annuity at age 80 is not required. This is an alternative to a LIF.

Long Term Disability (LTD)

A plan that provides income protection to group plan members who are totally disabled for an extended period of time, typically more than six months. LTD generally reimburses a percentage of income between 50 and 70 per cent.

M

Maintenance Medications

Drugs prescribed to stabilize a long-term or chronic illness or its symptoms. Examples include medications for asthma or hypertension.

Major Dental Services

Dental services including crowns, gold inlays and onlays, full dentures, partial removable dentures and fixed bridgework.

Maritime Co-operative Services

Known today as Co-op Atlantic, this organization is a business leader in the Maritimes in many areas, including real estate and insurance.

Market Value

The price of an investment if offered for sale in a fair market.

Management Expense Ratio (MER)

The percentage of total fund assets used to cover management fees and operating expenses.

Master Policy

A legal contract between an insurer and group policyholder in which the insured individuals (plan members) are not party to the contract.

Maternity Leave

The period of time a group plan member is absent from work and receiving employment insurance benefits while pregnant or after having given birth and while caring for a newborn baby or after adopting a child.

Maximum Benefit

The highest amount available under an insurance policy.

Morbidity

The rate of disability or proportion of disabled individuals within a group or population.

Mortality

Frequency of deaths within a group or population.

Fund

Funds from individual investors that are pooled together to be invested on their collective behalf. A well-diversified portfolio of securities having a unit value that fluctuates in line with the underlying investments.

N

Negligence

To fail to do what a reasonable and prudent person would do, or to do what such a person would not do; possibly resulting in property damage, injury or death.

Net Rate of Return

The rate of return earned by an investment after all applicable fees and deductions have been applied.

Net Salary

Gross salary less involuntary deductions for income tax, Canada Pension Plan (CPP) and Employment Insurance.

Net Worth

Total assets minus total liabilities.

No-fault Insurance

An insurance program/policy where, regardless of who caused the accident, you file a claim with your own insurance company. No-fault insurance applies in Ontario. Quebec also had a degree of no-fault for bodily injury and death benefits. The other provinces have no-fault accident benefits coverage. In Newfoundland and Labrador, accident benefits coverage is not mandatory.

Non-registered Investments

Any investments or capital not held within a registered account.

O

Old Age Security (OAS)

A government program available to qualifying Canadians that provides a monthly payment starting at age 65.

Ontario Credit Union League

The Ontario Credit Union League was formed in 1941 to meet the needs of the province's credit unions. In 1990, its name was changed to Credit Union Central of Ontario.

Orthodontics

The treatment and appliances used in the correction of faulty meeting of the upper and lower teeth.

Out of Country Emergency Medical Care

Benefits for emergency medical expenses incurred while travelling outside Canada. Expenses may include hospital room, physicians' services, medical supplies, x-rays, prescription drugs and ambulance service.

Over the Counter (OTC) Drugs

Drugs for which a physician or dentist may write a prescription but are legally available without a prescription for a lower cost. Most drug plans do not cover OTC drugs.

Ownership

Vehicles should be registered in the name of the real owner, the person who has a financial interest in the vehicle. For instance, if a son or daughter is buying a vehicle from a parent, or on instalment payments, he or she is considered to be the real owner.

P

Paramedical Practitioner

The services of health practitioners, for example: physiotherapist, chiropractor, massage therapist, psychologist, speech therapist, osteopath, naturopath, podiatrist or acupuncturist.

Parental Leave

The period of time a plan member is absent from work and receiving employment insurance benefits while caring for a newborn baby or after adopting a child.

Partial Disability

Some group benefit plans provide a level of income replacement when, due to a medically diagnosed condition, a plan member is only able to work in a reduced capacity.

Participation Requirements

The percentage of employees who must join a group benefits plan.

Peril

An event or condition that causes or has the potential to cause damage or loss, such as a fire or flood.

Periodontics

Treatment of the soft tissue and bone surrounding and supporting the teeth.

Permanent Life Insurance

Life insurance with a cash value, such as whole life or variable life. Permanent life insurance generally refers to most forms of life insurance other than Term Life Insurance.

Personal Property Limit

The maximum amount paid if some or all of the belongings usual to the occupancy of a home suffer loss or damage caused by an insured peril.

Pharmacare

The term for a drug benefit plan sponsored by some Provincial Health Insurance Plans.

Physical Hazard

The condition of or pertaining to property, which could lead to the occurrence of loss. See also Peril.

Plan Administrator

An individual or company responsible for administering a group benefits plan. Administration may include enrolment, record keeping, eligibility verification, premium processing and settlement of claims. The term is also used to describe the employee benefit contact person at the plan member's workplace.

Plan Member

An employee or association member of the policyholder or affiliated company who has met the eligibility requirements for participation in the benefit plan.

Plan Sponsor

A party that establishes a group benefit plan, usually an employer.

Policy

The legal contract between an insurer and a policyholder under which the insurer agrees to pay the policy benefit when the loss specified in the contract occurs and the policyholder agrees to pay the insurer the premium for providing this coverage.

Policy Period

The duration of the policy, most often one year.

Policyholder (Group)

The owner of the policy, usually the employer.

Pooled Benefits

Benefits where rates are not affected by the actual claims experience of the group. Instead, the rates are affected by the claims experience of a collection of groups: the pool. Groups benefit from the spread of among the pool. Life and long term disability benefits are generally pooled.

Pooled Segregated Fund

Operates in much the same way as a fund in that investors pool their contributions with others in order to invest more effectively. It provides professional investment management expertise and cost benefits normally available only to large investors. Pooled funds are segregated from the general assets of Co-operators Life and are the legal property of the unit holders.

Pooling Charge

The premium charged by the insurer to assume the under an aggregate stop loss or individual stop loss arrangement.

Portfolio

The entire asset holdings of an individual or group of individuals.

Portfolio Funds

These funds are a combination of underlying funds managed by a variety of fund managers. These funds simplify investment selection and provide a comprehensive range of options. One fund provides an appropriate asset mix and full diversification.

Predetermination

Insurers typically ask plan members to submit a cost estimate for dental or health care expenses likely to exceed a certain amount. The insurer responds in writing outlining how much of the expense the plan will pay if the service is rendered while the coverage is in effect.

Pre-existing Condition

A medical condition that existed prior to becoming insured. Some plans may cover these conditions after a certain period of time while others may permanently exclude benefits if the loss is caused by the pre-existing condition. This is most commonly found in long term disability policies.

Premium

The amount of money a policyholder agrees to pay an insurer for providing the benefits outlined in the policy.

Premium Tax

A provincial tax charged on group benefit premiums.

Pre-Natal Benefit

A benefit found in relatively few group benefit policies that reimburses the cost of a funeral for a still-born infant.

Prescribed Registered Retirement Income Fund (PRRIF)

A payout option at retirement for locked-in funds. It is similar to a Life Income Fund (LIF), but there is no maximum amount, therefore the full amount may be withdrawn in a lump-sum. Only available in Saskatchewan and Manitoba.

Prescription Drug Plan

See Drug Plan.

Prescription Drug Formulary

See Drug Formulary.

Primary Insurance

The provision of primary coverage by an insurer. The primary insurer has a direct contractual relationship with the insured and is named in the insurance policy.

Principal Residence

The dwelling where the insured resides more than 50% of the time.

Principal Sum

The lump sum payment made for accidental death and sometimes for loss of sight, loss of hearing and certain dismemberment losses in an accidental death & dismemberment (AD&D) plan.

Proof of Loss

The information the plan member is required to provide to prove his/her entitlement to benefits under the policy.

Property and Casualty (P&C) Insurance

All types of insurance excluding life insurance and governmental insurance.

Property Insurance

Covers an insured's property against damage, destruction or loss by an insured peril.

Proposal

A proposed plan of action; an offer that is presented for acceptance or rejection.

Provider

An individual or organization providing health or dental services.

Provincial Health Insurance Plan

Provincial government-sponsored plans that provide some degree of coverage for services such as hospital care, chronic care and drugs.

Q

Quebec Pension Plan

Operated in the province of Quebec, it is the equivalent of the Canada Pension Plan (CPP).

R

Rate Category/Class

A grouping of factors into a single category to reduce the number of variables for determining a premium.

Rate of Return

The performance of an investment over a period of time.

Rate/Rating

The cost per unit of insurance coverage. Rating factors such as rate class, amount of insurance, location, etc., can determine a policy or coverage premium.

Reasonable and Customary Expense

The current common charge made for a similar procedure in a particular geographic area.

Refund Accounting

The annual determination of the past year's surplus or loss. Funds are then either owed by the policyholder to the insurer, or to the policy holder by the insurer. The plan is credited with premiums and interest and charged with claims and expenses.

Registered Education Savings Plan (RESP)

A program regulated by the federal government of Canada offering subsidies and potential tax advantages to help Canadian residents save and invest money to support the higher education of eligible dependent children.

Registered Pension Plan (RPP)

A registered savings plan that follows specific provincial legislation.

Registered Retirement Savings Plan (RRSP)

A plan enabling Canadian citizens to establish tax-sheltered accounts to accumulate money toward retirement. The program was developed by the government and provide immediate tax savings and allow investments to remain tax sheltered until withdrawn at retirement age.

Registered Retirement Income Fund (RRIF)

An account into which you transfer your RRSP funds at retirement to retain the same tax advantages and provide a flexible stream of retirement income. RRIFs have a required minimum annual payment.

Rehabilitation Program

Provided at the discretion of the insurer, this program is designed to assist disabled workers return to work. It may include assessment, treatment, rehabilitative employment and other services.

Reimbursement Plan

Plan members submit a claim for payment (reimbursement) by the insurer.

Reinsurance

Insurance for insurance companies. When an insurance company has too large a to carry alone, they purchase insurance from a reinsurer. The process is transparent to the policyholder.

Reinsurance Company

To protect the insurance company from major losses, the primary insurer will typically hold a designated amount of the themselves. Amounts in excess of that are placed with a reinsurance company under a reinsurance agreement. In the event of a claim, the primary insurer would pay the claim and collect from the reinsure company. The process is transparent to the policyholder.

Renewal

Continuance of coverage under a policy beyond its original term by the insurer's acceptance of the premium for a new policy term.

Replacement Cost

Repairs or replacement are made with material of like kind and quality without cost to the insured for depreciation or betterment.

Replacement Cost Endorsement

The coverage purchased to ensure property losses are settled on replacement with like kind and quality rather than an actual cash value basis.

Replacement Value

The cash value representing what it would cost to replace the particular article that is covered by the insurance policy.

Reported But Not Paid Reserve (RBNP)

A reserve established to fund the eventual payout of claims that have been received but remain unpaid at the end of the accounting period.

Reserve

A sum set aside by an insurer as a liability to fulfill future obligations.

Retention Accounting

See Refund Accounting.

Retention Charges

Also known as expense charges, this is the portion of premium charged by the insurer for expenses and profit.

Return-to-Work Program

A program of rehabilitation and job modification to get disabled workers back to work as quickly as possible.

Reunderwriting

Reviewing policies to ensure that they are adequately rated to reflect the involved.

Rider

Additional coverage for a basic policy to provide insurance for a specific item or peril.

Risk

The subject of the insurance coverage, or the probability of an event occurring.

Risk Factors (Group)

Conditions that influence , such as age, gender, occupation, industry.

Risk Tolerance

The level of an individual is comfortable with while investing.

Rule of 72

The number of years it will take for money to double in value is72 divided by the rate of return.

S

S&P TSX Index

An index that tracks the investment performance of the largest capitalized Canadian companies traded on the Toronto Stock Exchange. It is a market-weighted index, meaning that the larger the capitalization of a company, the more weight it carries in the index.

S&P 500

Standard & Poor’s 500 Total Return Index represents the value of the top 500 companies traded on the New York Stock Exchange. The top 500 companies are selected based on the total value of outstanding stocks.

Salary

See Gross Salary.

Salary Continuation Plan

See Short Term Disability and Long Term Disability.

Saskatchewan Wheat Pool

Saskatchewan Co-operative Wheat Producers Ltd., commonly known as the Saskatchewan Wheat Pool, was incorporated on August 25, 1923, and was the province’s largest business for many years.

Schedule of Benefits

A summary of the benefits and amounts of insurance available under the policy.

Second Opinion Consult

A service that provides plan members access to advice from specialists at top North American hospitals if diagnosed with a serious illness.

Second Party

The insurance company issuing the policy is considered to be the second party. Two parties, the insured and the insurer, are necessary to form a contract; i.e., the policy. See also First Party.

Segregated Fund

A fund that guarantees all or most of your principal investment upon maturity or death. funds sold by financial institutions generally have no guarantees at all. Only life insurance companies can offer segregated funds.

Security

A financial instrument such as stock, bond or treasury bill.

Selection of Criteria

Particular criteria or features of a that determine whether or not it is an acceptable to insure.

Self-Billed Group

Records are kept by the group plan sponsor and positively enrolled with the insurer, eliminating the need for a group plan sponsor to verify health and dental claims.

Self-Reporting Group

The policyholder maintains records for each plan member, verifies the plan member's eligibility, calculates the required premium and remits premium to the insurer.

Service Partners

Our Service Partners include body shops, contractors, and rental companies who provide claims service to you in the event of a loss. Established parameters determine who we do business with.

Short-term Bond

A bond with maturity date of less than three years.

Short Term Disability (STD)

Also known as weekly indemnity, this is a plan that provides income protection to plan members who are totally disabled for a short period of time, typically less than six months. STD will generally reimburse a percentage of income between 50 and 70 per cent.

Sick Leave

An employer-administered income replacement plan that replaces full salary on a short term basis in the event of the plan member's disability.

Single Life Annuity

An annuity where the payment will stop on the death of one person, the annuitant.

Social Insurance Number (SIN)

A nine-digit number issued by the government of Canada to citizens, permanent residents and some categories of temporary residents for official identification in the provision of government services and income taxation.

Spousal Plan

A registered plan that offers income-splitting opportunities. The one spouse contributes on behalf of the other one.

Spouse’s Allowance

A government program to provide extra retirement income to lower-income households.

Stock

An equity or a share in a corporation. When you invest in a company’s stock, you’re buying a piece of the company.

Stock Exchange

A stock exchange, such as the Toronto Stock Exchange (TSX), is a place where licensed investment professionals can buy and sell stocks and other investments.

Subscriber

A plan member under a pay-direct drug card plan.

Subscriber Number

The unique personal identification number assigned to each plan member with a pay-direct drug and/or online dental plan.

Superintendent of Insurance

The chief officer of the Government Insurance Regulatory Department, which governs the insurance industry.

Surcharge

The increase in base premium due to accidents, convictions or a specific use of the vehicle.

Survivor Benefit

In the event of the death of the plan member, provides continuation of health and dental benefits to the plan member's dependents.

T

Tax Deferred

Tax deferred means the tax on contributions and earnings isn’t paid until withdrawn in cash from the plan.

Term Insurance

Life insurance coverage for a specific length of time, as specified in the contract; for example, a 20-year term.

Termination

The conditions that result in the plan member's benefits ceasing, such as when their employment term ends.

Third-Party Administrator (TPA)

A professional insurance administrator or broker who maintains all records regarding the individuals covered under a group benefits plan. The TPA will generally be responsible for premium calculation and collection and may also pay claims.

Third-Party Liability

Responsibility for a disability caused by an injury or sickness that another party is responsible for; for example, injuries from an automobile accident where the other driver was responsible. If you have a group disability plan, it is common for the group disability insurer to pay disability benefits in this situation after receiving a signed agreement from the plan member to reimburse the group disability insurer when the third-party claim is settled.

Time Horizon

The length of time you will be investing. A longer time horizon can usually accept more .

Top Down

An investment style that begins with an assessment of the economy as a whole rather than by a fundamental analysis of companies. See also Bottom Up.

Total Disability

As the result of a medically diagnosed condition, the plan member is prevented from performing the usual and customary duties of his/her occupation and is not engaged in any other occupation or performing any work for profit.

Treasury Bills (T-Bills)

Short-term debt instruments of the government. They are issued in three, six, and 12-month maturity dates.

U

Underwriting

The process of selecting risks for insurance and determining the dollar amount and coverage terms under which the insurance company will accept the .

Underwriting Profit (or Loss)

(1) The profit or loss realized from insurance operations, as contrasted with that realized from investments. (2) The excess of premiums over losses and expenses (profit) or the excesses of losses over premiums (loss).

Uninsured Motorist

Coverage for damage to your auto, its contents and loss of use where a third party who is responsible for the accident is identified and uninsured. This coverage is subject to a deductible. See also Third Party Liability.

Unit

A measurement for investment funds. For example, purchases and sales are made in units, such as 100 units in an investment fund.

United Co-operatives of Ontario (UCO)

Formed in 1938, the basic objective of the United Co-operatives of Ontario was to improve the economic and general welfare of farmers and other co-operators in the province by performing central wholesale procurement, marketing and service functions for its member farm supply co-operatives.

Unit Value

The value of one unit in an investment fund is calculated by dividing the fund’s market value by the total number of units in the fund.

Universal Life Insurance

A flexible premium life insurance policy under which the policyholder may change the death benefit from time to time (with satisfactory evidence of insurability for increases) and vary the amount or timing of premium payments. Premiums (less expense charges) are credited to a policy account from which mortality charges are deducted and to which interest is credited at rate which may change from time to time.

V

Variable Rate Option (VRO)

An investment account where interest is credited daily. Daily interest begins to accumulate the day after the date of deposit or transfer of funds to this account and is compounded daily.

Value Style

An investment style that chooses primarily companies with good fundamentals and appear to be undervalued relative to the market.

Vested

The point at which an employee is entitled to keep the employer contributions made on their behalf to a company pension plan.

Vesting

The process by which an employee obtains full credit for the employer contributions into a benefit plan, normally a pension plan.

Vision Care Benefit

A benefit that reimburses a portion of expenses for prescription eyewear. Some plans also include a benefit for laser correction surgery.

Vision Provider Network

A network of providers offering plan members access to an expanded array of vision care benefits.

Void ab initio

To cancel a policy from the beginning.

Volatility/Return

Volatility and return are generally considered together when describing an investment option. In general, the greater the volatility of an investment (how it varies from the average return), the greater the return (or potential income) the investor can expect.

W

Waiting Period

See Elimination Period.

Waiver of Premium Reserve

A reserve set up when a plan member qualifies for the waiver of premium. It funds the potential liability of a life insurance claim as premiums are no longer received but the insurer retains the liability even if the policy is cancelled.

Weekly Indemnity

See Short Term Disability.

Whole Life Insurance

Life insurance payable to a beneficiary at the death of the insured, whenever that occurs. Premiums may be payable for a specified number of years (limited payment life) or for life (straight life).

Will

A legal document that permits an individual to make decisions on how his or her estate will be managed and distributed after death.

Workers Compensation

Provincially sponsored, employer-funded income replacement plan for work-related accidents and illness. In Ontario, this is referred to as the Workplace Safety & Insurance Board.

Y

Yield

Investment return measured as a percentage of the current market value of the investment. Most often used in reference to bonds or debentures.