Home Terms Main Page

This site contains comprehensive definitions for a wide range of terms that cover topics such as home, mortgage, insurance, homebuyer, real estate, property, buy home, home insurance, financing, home financing, home buyer, first time homebuyer, homes, homebuying, credit, condo...

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Contingent Owner

This is the person designated to become the new owner of a life insurance policy if the original owner dies before the life insured.

Deferred Annuity

An annuity providing for income payments to commence at a specified future time.

Spousal Registered Retirement Savings Plan

This is an RRSP owned by the spouse of the person contributing to it. The contributor can direct up to 100% of eligible RRSP deposits into a spousal RRSP each and every year. Contributing to a spouses RRSP reduces the amount one can contribute to one's own RRSP, however, if the spouse is a lower income earner, it is an excellent way in which to split income for lower taxation in retirement years.

Vanishing Premium

This term relates to participating whole life insurance and the use of the dividend to reduce or completely eliminate the need for future premiums. In the 1980's life insurance company's profits from investment were exceedingly high compared to historical experience. It became common for a salesperson to show new prospective clients how quickly his or her insurance company's dividends would cover the future cost of future premiums. In some cases more emphasis was put on the value of future dividends than on the fact that future dividends were not guaranteed and could only be projected based on current earnings. Many life insurance buyers have since learned that the dividends they expected in the 80's no longer exist in the 90's and they are continuing to dig into their pockets to pay insurance premiums.

Asset

All things of value owned by an individual or organization.

Cost of Insurance

The cost of insuring a particular individual under the policy. It is based on the amount of coverage, as well as the underwriting class, age, sex and tobacco consumption of that individual.

Risk

Calculated chance of loss.

Valuation Date

Date on which valuation occurs.

P.I.T. (PIT)

Principal, interest and taxes. Together, these make up the regular payment on a mortgage if you elect to include property taxes in your mortgage payments

Prepayment Option

The ability to prepay all or a portion of the principal balance. Prepayment charges may be incurred on the exercise of prepayment options.

A/C Disconnect

The main electrical ON-OFF switch near the A/C condenser.

Built-Up Roof

A roofing composed of three to five layers of asphalt felt laminated with coal tar, pitch, or asphalt. The top is finished with crushed slag or gravel. Generally used on flat or low-pitched roofs.

Ductwork

A system of large tubes, pipes or channels (ducts) designed to deliver air to and from a furnace or other air-handling unit.

Rabbet

A groove cut in a board to receive another board.

Tray Ceiling

A decorative ceiling treatment used to add volume and/or height to a room. 2 Common types are: 1) Angled area toward the center leading to a flat ceiling surface, and 2) Stepped square edged leading toward the center of the ceiling.