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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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This is the person designated to receive the death benefit of a life insurance policy if the primary beneficiary dies before the life insured. This is a consideration when husband and wife make each other the beneficiary of their coverage. Should they both die in the same car accident or plane crash, the death benefits would go to each others estate and creditor claims could be made against them. Particularly if minor children could be survivors, then a trustee contingent beneficiary should be named.
Term life insurance products are offered as non-convertible or convertible to a certain time in the future. The coversion right has a time limit, usually to the policy holder's age 60 or possibly even age 70. This right means that the policy holder has the right to convert their existing policy to another specific different plan of permanent insurance within the specified time period, without providing evidence of insurability. There is a slightly higher cost for a term policy with the conversion priviledge but it is a valuable feature should a policy holder's health change for the worst and continued insurance coverage becomes a necessity.
This is a recently coined phrase describing the concept of using Universal Life Insurance to tax shelter earnings which can be used to generate tax-free income in retirement. The concept has been described by some as "the most effective tax-neutralization strategy that exists in Canada today."
This is the maximum value of a policy that an insurance company will issue without the applicant taking a medical examination, although medical questions are invariably asked during the application process. When a non-medical issue is made through group insurance, in most cases, medical data is not requested at all.
This is the person who owns the insurance policy. It is usually the same person as the insured but it could be someone else who has the permission of the insured to be the owner, like a spouse, a common-law-spouse, an offspring, a parent, a corporation with insurable interest or a business partner with insurable interest. In order for someone else to be an owner of your policy, they have to have a legitimate insurable interest in you.
Coverage against accidental death usually payable in addition to base amount of coverage.
Insurance or insurability provided on current or future children of insured.
Calculated chance of loss.
The time over which all regular payments would pay off the mortgage. This is usually 25 years for a new mortgage, however can be greater, up to a maximum of 40 years.
Also called debt-to-income ratio. It is the percentage of a person's monthly earnings used to pay off debt obligations. Lenders consider two ratios, constructed in slightly different ways. The first, called the front-end ratio, is the ratio of the monthly housing expenses -- including principal, interest, property taxes and insurance (PITI) is compared to the borrower's gross pretax monthly income. In the back-end ratio, a borrower's other debts, such as auto loans and credit cards, are also figured in. Lenders usually take both into account and set an acceptable ratio, which might be expressed as 33/39. Some lenders, and some lending qualifying agencies such as FHA, take only the back-end ratio into account.
Frame lumber installed between the wall studs to give additional support for drywall or an interior trim related item, such as handrail brackets, cabinets, and towel bars. In this way, items are screwed and mounted into solid wood rather than weak drywall that may allow the item to break loose from the wall. Carpet backing holds the pile fabric in place.
The rail, posts and vertical balusters along the edge of a stairway or elevated walkway.
A room with no specifically designated function, unlike a living room, bedroom, or kitchen. Is not included in the initial square footage.
The projecting overhang at the lower edge of a roof.
The square footage in a home that is heated and/or cooled. The space occupied by two-story rooms and stairwells is counted once in the lower floor's square footage. Living square footage does not include garages, bonus rooms, or porches unless otherwise noted.