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Glossary

Accident – If an accident is the cause of death, one can have an added advantage with payment through life insurance policies. 

Accrual Rate – It is the rate at which interest is calculated. The accrual rate in the basic document is to accommodate of an independent market index, which varies, plus a margin, and is established by the financial institutions.

Annual Percentage Rate – Annual cost of credit over the loan term, counting interest, service charges, points, loan payments, etc.; in short, cost of credit borrowers pay.

Annuity – In the current market scenario, the insurance industry defines the term annuity as the payment of a fixed sum to an investor at standard intervals.

Base Rate – The Bank of England fixes a base rate which is applied as a standard yardstick against all other rates.

CCA – Its chief aim is to offer a uniform system of controlling any type of lending activity. Controlling lenders through a licensing system and individual credit agreements are two ways to control the system.

Death Benefit – The amount to be paid, as affirmed in a life insurance policy, to the designated beneficiary, upon the death of the insured person.

Financial Services Authority (FSA) – A non-governmental body that regulates all financial services in the UK. It regulates banks, credit unions, insurance and investment firms, and also independent financial counsellors.

Flexible Loan – It is a loan for which the repayment term is not fixed. It may change according to the wish of the borrower, according to his repaying ability.

IFA (Independent Financial Advise) –An IFA can be a single person or a small or large organisation. They can arrange a wide range of products from all the financial-service companies.

Unsecured Loans – With unsecured loans, borrowers do not have to place collateral against the loan amount. The repayment capacity of the borrower decides the amount he qualifies for.

Secured Loans – These loans backed by security and the rate of interest is lower than other loans.

Personal Loans – These loans may be used for any purpose. Both secured and unsecured loan deals are available as personal loans. But, they may only be used for personal purposes.