Acronymns/Definition Flashcards
(43 cards)
AAV
Asset Account Value
Annual Income - Client Profile
- This figure represents the client’s taxable estimated gross annual household income.
- It should include total wages, salaries, tips, commissions, bonuses and investment income, such as dividends and income from rental property (if applicable) for the household
BVT
Book Value Transfer
CTIR
Children’s Term Insurance Rider
CWC
Contingent Withdrawal Charge
DCA
Dollar Cap Averaging
Define “Cap Rate”
Serve to limit the amount of growth in the applicable market index that will be credited to the EIA
Define “Dollar Cost Averaging”
• DCA is a systematic and efficient method of investing. • An individual continuously invests a fixed dollar amount into their retirement vehicle every month. • Due to constant fluctuation, an investor will purchase more units of a security when prices are low and less when price increase. • The benefit is that over the long term, the cost will average out.
Define “Non-qualified Annuities”
• Annuities owned outside qualified retirement plans such as a 401(k) or 403(b) at work or an IRA • Funded by after-tax dollars
Define “Pro Rata”
• A term used to describe a proportionate allocation. • It is a method of assigning an amount to a fraction according to its share of the whole. • For example, if two partners own a company (one with 51% ownership and the other w/ 49% ownership) then the pro rata distribution of profit will be 51% and 49% respectively.
Define “Qualified Annuities”
• Annuities purchased to fund qualified retirement plans such as a 401(k) or 403(b) at work or an IRA • Funded by pre-tax dollars
Define “Signature Guarantee”
• A signature guarantee is a form of authentication, issued by a bank or other financial institution, which verifies the legitimacy of a signature and the signatory’s overall request. • This type of guarantee is often used in situations where financial instruments are being transferred.
Define “Vesting”
• It is a legal term that means to earn a right to future payment, asset or benefit. • In this case, it means you earn the right to the future payment of the defined benefit plan which stems from the employers contributions.
Equity-Indexed Annuity Participation Rate
• Method for determining the percentage of the market’s index growth that will be credited to the EIA • For example, a 75% participation rate of a 8% market rate growth will allow the EIA to be credited with 6% interest (.75 X .08 = 6%)
GAWA
Guaranteed Annual Withdrawal Amount
GIO
Guaranteed Interest Option
GTWR
Guaranteed Transfer Withdrawal Rate
GWB
Guaranteed Withdrawal Benefit
GWR
Guaranteed Withdrawal Rate
Household Expenses - Client Profile
Monthly Fixed HH Expenses — Monthly reoccurring fixed HH expenses should be included in this section, e.g., mortgage, rent, utilities, insurance and car payments.
IL Legacy
Incentive Life Legacy
Investment Experience - Client Profile
Includes all qualified and non-qualified experience within an asset class. Experience does not require there to be any current holdings within the referenced asset class.
Investment Objective - Client Profile
• When selecting an investment objective and risk tolerance on the application, advise the client to choose one that matches his or her stated objective and tolerance level as it applies to that particular purchase. • This practice helps ensure consistency between a client’s investment objective and risk tolerance and the selected asset allocation within the product. • If the client’s investment objective and risk tolerance for a particular purchase is inconsistent with his or her overall general profile, maintain notes to this effect in the Client File to avoid confusion.
LBR
Living Benefits Rider
