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Financial Jargon Buster - D

Death Benefit: A life insurance payment made upon the death of an insured person.
Debit card: Debit cards look like credit cards or ATM (automated teller machine) cards, but operate like electronic cash or a personal cheque. When a purchase is made with a debit card, the amount is automatically deducted from the associated account. No credit is extended to the cardholder and hence no debt or interest charge is incurred.
Declination: The rejection of an insurance application by an insurance company.
Declining Grant: A multi-year grant that becomes smaller each year, in the expectation that the recipient organization will increase its fundraising from other sources.
Decreasing Term Insurance: Life insurance which pays out a lump sum if you die within the term, but where the insurance sum assured reduces during the term. The earlier you die in the term, the bigger the payout your dependants get.

Deeds Fee: An administration charge made by lenders when you repay the mortgage to release the deeds of the property. Also known as a sealing fee.

Deferred Annuity

An arrangement by which a premium is paid in return for annuity payments that will commence at a future date.

Deferred Period

In relation to Permanent Health Insurance (PHI) / Income Protection, refers to the period between the commencement of illness, and the date at which eligibility for payment of benefit under the insurance policy would commence.
iIn relation to a Deferred Annuity, refers to the period between payment of the premium and commencement of the annuity payments.

Defined Benefit Pension Scheme

Pensions scheme where the rules that define the benefits of the scheme are independent of the rules relating to contributions to the scheme. The benefit will usually be expressed as an amount of pension, often related to earnings and service.

Deflation: Deflation is the opposite to inflation and means that the money you have today will be worth more tomorrow. Unfortunately, it isn't as good as it sounds, because it makes people reluctant to spend, which is harmful for the economy. It is also very uncommon.

Demonstration Grant: A grant made to establish an innovative project or program which, if successful, will serve as a model and may be duplicated by others.

De-mutualisation: The procedure by which a mutual organisation owned by its members changes to a limited company owned by shareholders. This will often result in substantial windfall gains for the members (who are in effect the owners of a mutual organisation).
Dependant: An individual, a spouse or child or someone who depends on another for financial support and maintenance with regard to the normal necessities of life.

Deposit account: An account with a bank or building society, which pays a variable rate of interest. Higher rates are often available if you are willing to give notice before withdrawing your money.

Deposit Premium: The premium deposit paid when an application is made for an insurance policy.
Depreciation: The decrease in value of property over a period of time due to wear and tear or obsolescence.

Derivatives: A collective name for futures, options and warrants.

Direct debit

A procedure under which an organisation to whom a payment is due claims the amount directly from the bank account of its debtor.

Disability

Physical or mental condition that prevents a person from undertaking 'normal' duties of a job or the ordinary activities of life. For insurance purposes the word 'disability' will have a special and particular meaning which will be defined in the policy concerned.

Disclosure

The duty of any person applying for an insurance policy to tell the insurer all relevant information affecting the risk.
The duty of an intermediary to inform his client if commission is being paid (and, if so, how much) in respect of the business being placed.

Discounted rate: An arrangement which gives you a set reduction, or 'discount' off our standard variable rate for a specified period of time. At the end of the specified period your mortgage rate will change to the standard variable rate in force at the time. Sometimes there are redemption penalties associated with this type of deal.

Discretionary Entrant: A member of a group insurance plan who did not have an automatic right to membership under the eligibility terms of the policy.
Discretionary Funds: Grant monies which are distributed according to a donor's judgement of requests as they are received, rather than funds whose purpose is predetermined.
Dismemberment: Loss of limb or sight.

Distribution: The payments of any investment income generated by a fund, usually made either half-yearly or quarterly. You can choose to have each distribution paid to you or to reinvest it in the fund for greater capital growth.

Dividend

An amount returned to the holders of certain types of policy, by the insurance company, out of its earnings
An annual payment by a company to its shareholders out of accumulated profits