Additional Glossary Terms


Alternative Investments

An alternative investment is an asset that is not one of the conventional investment types, such as stocks, bonds and cash. Alternative investments include private equity, hedge funds, managed futures, real estate, commodities and derivatives contracts.

Business Continuity Planning

Business continuity planning (BCP) is the creation of a strategy through the recognition of threats and risks facing a company, with an eye to ensure that personnel and assets are protected and able to function in the event of a disaster.

College Savings Plans (529)

A tax-advantaged method of saving for future college expenses that is authorized by Section 529 of the Internal Revenue Code.

Disability Insurance

Disability insurance offers income protection to individuals who become disabled for a long period of time, and as a result can no longer work during that time period.

Health Insurance

Health insurance is a type of insurance coverage that pays for medical and surgical expenses incurred by the insured. Health insurance can reimburse the insured for expenses incurred from illness or injury, or pay the care provider directly.

Life Insurance

Protection against financial loss that would result from the premature death of an insured person. The three main components of the life insurance contract are a death benefit, a premium payment and, in the case of permanent life insurance, a cash value account.

Long Term Care Insurance

Long-term care insurance policies reimburse policyholders a daily amount (up to a pre-selected limit) for services to assist them with activities of daily living such as bathing, dressing, or eating. You can select a range of care options and benefits that allow you to get the services you need, where you need them.

Non-Qualified Accounts

An investment that does not qualify for any level of tax-deferred or tax-exempt status. Investments of this sort are made with after-tax money. They are purchased and held in tax-deferred accounts, plans or trusts. Returns from these investments are taxed on an annual basis.

Pension Optimization

Pension optimization or maximization is a strategy to gain death benefit protection and to help get the most out of defined pension plans.

Real Estate Investment Trust (REIT)

A pooled investment that invests primarily in real estate. REIT's trade like stocks on the major exchanges. Keep in mind that the return and principal value of REIT prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost.

Retirement Plans

The process of determining retirement income goals and the actions and decisions necessary to achieve those goals. Retirement planning includes identifying sources of income, estimating expenses, implementing a savings program and managing assets.

Risk Assessment

Risk tolerance is a measurement of an investor’s willingness or ability to handle investment losses.

Self-Directed 401(k)

A brokerage window attached to an individual’s 401(k) account in which the account holder can direct the investment of funds and expand their investment options.

Simple IRA

A retirement plan that can be established by employers, including self-employed individuals (sole proprietorship and partnerships). The Simple IRA allows eligible employees to contribute part of their pretax compensation to the plan. This means the tax on the money is deferred until it is distributed.

Stocks

An equity investment in a company. Stockholders own a share of the company and are entitled to any dividends and financial participation in company growth. They also have the right to vote on the company’s board of directors. Keep in mind that the return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost.