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Benson Kearley IFG helps you understand...

The world of insurance can be quite hard to understand. We’re here to provide you with terms you can understand, give you advice and offer our help—all right at your fingertips.

Insurance Glossary

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BACK-END LOAD FUND

A type of mutual fund that charges the investor a fee when the fund is redeemed within a set period of time following purchase.

BAILEE

Person to whom goods or property are entrusted for a stated purpose, whether in exchange for payment (consideration) or not. Also called a Depository.

BALANCED FUND

A mutual fund that has both debt and equity holdings (stocks and bonds).

BASIS POINT (bps)

One one-hundredth (1/100 or 0.01) of one percent. A commonly used measurement of yield differences on assets. 100 basis points = 1%.

BASIC RATE

The standard charge for a given type of risk.

BEAR MARKET

A stock market whose index of representative stocks (such as TSE 300 Composite Index) is declining in value (usually 20% or more) for a period of time.

BENCHMARK

A predetermined set of securities that are used as a comparison for the performance of a fund. The benchmark serves as the starting point for the money manager who adjusts the proportions of the funds in the benchmark in an attempt to capture superior returns through market timing.

BENCHMARK ERROR

This occurs when an inappropriate benchmark or index is used as a comparison for the performance of a fund. For example, using the TSE 300 (a Canadian stock index) as a benchmark for a fund constructed completely of foreign stock.

BETA

Statistical term used to illustrate the relationship over time between the degree of price changes of an individual security or mutual fund unit to similar securities or financial market indices.

BID

Proposal made by the prospective policyholder to an insurance company to obtain the cost of a premium for a specific period.

BINDER

Temporary proof of insurance of property, pending issuance of a policy. The binder has the same value as the policy, and must be terminated in the same manner as an issued policy would be.

BLOCK SALE

A transaction that takes place with a minimum of 10,000 stocks involved. Block sales may sometimes be associated with either a better price or lower cost per share.

BODILY INJURY

Term used in Auto and Casualty policies meaning physical injury, including sickness, disease, mental injury, shock or death.

BODILY INJURY LIABILITY

Pays when an insured person is legally liable for bodily injury or death caused by your vehicle or your operation of most non-owned vehicles. This coverage also pays for your legal defense if you are sued.

BOND

A financial instrument used to raise capital that represents an unconditional promise to pay a principal sum of money and interest payments at fixed dates.

BOND INDEX PORTFOLIO

A portfolio of bonds that closely resembles the available grades, coupons, and maturities in proportions or weights that resemble the actual bond universe.

BOND, DEBT INSTRUMENT

Document representing a debt, used to secure capital and accompanied by an unconditional promise of repayment of the principal, plus interest, on a determined date.

BOOK VALUE

A company's common equity value as determined from the firm's balance sheet.

BOTTOM-UP STRATEGY

A money management style where the manager focuses on individual stock selection and considers economic forecasts as only secondary in the decision-making process.

BREAK-AND-ENTER THEFT, "B&E"

Wrongful taking of property, without the consent of its owner, following forced entry into a building or property.

BROAD FORM

Any of the commercial or personal lines property forms which provide coverage on a named perils basis. This form normally adds the Extended Coverage and Vandalism and Malicious Mischief coverages. This form is generally used for coverages on a Homeowners Policy.

BROKER

A person who offers direct to the public a selection of various home, car and business insurance products from a number of insurers.

BUILDERS RISK INSURANCE

Insurance coverage on property under construction, including loss to buildings, machinery and equipment. Materials incidental to construction are also covered.

BULL MARKET

A stock market whose index of representative stocks (such as TSE 300 Composite Index) increases in value and is usually accompanied by higher profits, earnings and dividends, increased speculative activity, and a general feeling of prosperity.

BUSINESS INTERUPPTION

Insurance against business expenses and loss of income resulting from fire and other insured peril.

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