Terms to Know Financial Glossary
1035 Exchange
A tax-free process allowing policyholders to swap one life insurance or annuity contract for another, as long as it meets IRS guidelines.
401(k) Loan
A loan taken from a 401(k) balance that must be repaid with interest. If not repaid after leaving a job, it may be taxed and penalized.
401(k) Plan
An employer-sponsored retirement savings account where employees can contribute pre-tax income, often with employer matching, growing tax-deferred.
403(b) Plan
A tax-advantaged retirement plan similar to a 401(k), but designed for employees of non-profits and public schools.
Account Balance
The total amount of money in an account at a given time, including any deposits, withdrawals, and earned interest.
Adjusted Gross Income (AGI)
Your total income minus certain deductions, used as the basis for calculating taxable income on your tax return.
Administrator
A person appointed by the court to manage an estate when no will is present.
Annual Percentage Rate (APR)
The yearly cost of a loan, including interest and fees, expressed as a percentage.
Annuity
A contract with an insurance company that provides periodic payments in exchange for a lump sum or series of contributions.
Appraisal
An evaluation of an asset’s value, typically for real estate or investments, performed by a qualified professional.
Asset
Anything of value owned by an individual or business that can be converted into cash.
Asset Allocation
A strategy of dividing investments across different asset categories to manage risk and return.
Audit
A formal examination of financial records to verify accuracy and compliance with regulations.
Balanced Mutual Fund
A mutual fund that holds both stocks and bonds to balance risk and return.
Bear Market
A market condition where securities prices decline significantly over an extended period.
Beneficiary
A person or entity designated to receive assets from a trust, insurance policy, or retirement account.
Bond
A fixed-income investment where the issuer borrows money and agrees to repay it with interest over time.
Bull Market
A market condition where securities prices rise steadily over time, signaling economic optimism.
Capital Gain
The profit earned from selling an investment for more than its purchase price.
Cash Surrender Value
The amount a policyholder receives when canceling a life insurance policy before its maturity.
