Financial Jargon Buster - E
- Earned Premium
- The portion of an insurance premium for
which protection has already been provided by the insurer.
- Earnings Cap
- Since 1989 there has been an upper
limit on the amount of salary that can be taken into account when calculating
pensions arising from and contributions payable under an approved arrangement.
This is known as the 'earnings cap'. In the current year (1999-2000) the amount
is £90,600.
- Earnings per share
- A widely used indicator of the return
on equity investments. Any figure quoted represents the total amount of a
company's earnings (after deductions) divided by the number of ordinary shares
it has issued. (See also P/E)
- Effective Date
- The date on which insurance under a
policy will begin.
- Eligibility Date
- The date at which an individual becomes
eligible for benefits.
- Eligibility Period
- A specified period of time during which
potential members of a group insurance scheme may join without evidence of
insurability.
- Eligibility Requirements
- Requirements imposed for eligibility
for coverage, usually in a group insurance or pension plan.
- Eligible Employees
- Employees who meet the eligibility
requirements for insurance set out in a group policy.
- Employee Benefits
- Benefits offered to an employee by an
employer and usually paid for at least in part by the employer. Life, Health
and Critical Illness insurance obtained by an employer on a group basis are
examples of employee benefits.
- Employee Declaration
- A medical questionnaire issued to
member of a group insurance scheme when the members benefit level requires the
member to provide evidence of good health. This is usually the first stage of
the Medical Underwriting process.
- Endorsement
- An amendment of an insurance policy
that alters the provisions of the contract.
- Endowment
- A life assurance policy related to a
mortgage designed to pay off the amount originally borrowed at the end of the
mortgage term. An endowment policy will pay you a fixed amount on a set date or
if you die before that date, in other words it's both a way of saving and life
insurance. People often use endowments to repay interest only mortgages. The
drawback of them is that it is often unclear how much you are having to pay in
charges and the plans are often very rigid, so if you start an endowment and
then decide to cancel it, you might not get back what you paid in.
- Endowment Mortgage
- You only pay interest to the lender,
but you also have to pay a monthly premium for an endowment policy that you
take out with an insurance company. The endowment policy is designed to produce
a lump sum either at the end of your mortgage term or at your death if earlier,
to repay the capital you borrowed. You must remember though that the amount
paid out is not guaranteed and may not be sufficient to repay the capital
borrowed.
- EPP
- Executive Pension Plan.
- Equity
-
- A shareholding in a limited company. By extension, 'equities' is generally used to mean the whole range of shares traded on a Stock Exchange
- The amount by which the value of a house exceeds the total of the loans secured by mortgage(s) thereon.
- Equities
- Another word for stocks and shares.
- Equity release
- A type of remortgage where you own your
home outright but wish to use it as security for new borrowing.
- Escalation
- Refers to the increase in benefit
(usually annual) payable during the payment term of an insurance claim that is
not settled via a lump sum payment. For example, claims under an Income
Protection Policy might escalate annually in line with the Retail Price
Index.
- Estate
- Strictly, an interest in land, but
generally used to mean the total (land, chattels, investments, etc.) owned by
an individual.
- Ethical Investments
- Shares or similar investments (for
example, holdings in unit trusts) in companies supposed to conform to a
particular set of moral or ethical principles. Different ethical values have
led to a proliferation of funds of this nature with different principles &
for example, some will avoid investing in arms manufacture, and others will
avoid tobacco companies. There is ongoing debate as to whether the following of
such principles adversely affects the investment performance of ethical
funds.
- Euro
- The European Single
Currency.
- Ex Gratia Payment
- Latin for "from favour." A payment by
an insurer to an insured for which there is no liability under the
contract.
- Exchange of contracts
- The point at which the buyer and seller
have legally committed themselves to the sale and purchase of the
property.
- Execution only
- Where a customer buys a financial
product without receiving advice on its suitability.
- Excess
- A fixed amount of money which the
insured agrees to contribute toward the cost of a claim under an insurance
policy.
- Exclusions
- Conditions or circumstances listed in
the policy, for which the insurer will not provide benefits.
- Executive Pension Plan
- An individual occupational pension
arrangement that is normally used for senior employees / executives. The rules
of an occupational pension and not those of a personal pension govern an
Executive Pension Plan.
- Exempt Approved Scheme
- An Inland Revenue approved pension
scheme, which is established under an irrevocable trust and hence qualifies for
tax advantages relating to contributions, income and capital gains from
investments.
- Expense Ratio
- The ratio of insurance company
operating expenses to premiums.
- Experience Rating
- Process of determining the premium rate for a group risk, wholly or partially on the basis of that group's claims experience to date.
- Express money transfer
- This is a foreign currency payment to
an individual or organisation delivered electronically to a bank. It takes
around 2-5 days, depending on the currency and destination.
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