Definition of Assuris

Assuris

assuris is a not for profit organization that protects Canadian policyholders in the event that their life insurance company should become insolvent. Their role is to protect policyholders by minimizing loss of benefits and ensuring a quick transfer of their policies to a solvent company where their benefits will continue to be honoured. assuris is funded by the life insurance industry and endorsed by government. If you are a Canadian citizen or resident, and you purchased a product from a member life insurance company in Canada, you are protected by assuris.
All life insurance companies authorized to sell in Canada are required, by the federal, provincial and territorial regulators, to become members of assuris. Members cannot terminate their membership as long as they are licensed to write business in Canada or have any in force business in Canada.
If your life insurance company fails, your policies will be transferred to a solvent company. assuris guarantees that you will retain at least 85% of the insurance benefits you were promised. Insurance benefits include Death, Health Expense, Monthly Income and Cash Value. Your deposit type products will also be transferred to a solvent company. For these products, assuris guarantees that you will retain 100% of your Accumulated Value up to $100,000. Deposit type products include accumulation annuities, universal life overflow accounts, premium deposit accounts and dividend deposit accounts. The key to assuris protection is that it is applied to all benefits of a similar type. If you have more than one policy with the failed company, you will need to add together all similar benefits before applying the assuris protection. The assuris website can be found at www.assuris.ca.

Accidental Death and Dismemberment

Coverage that provides a lump-sum payment to you or your survivors if an accident results in the loss of a limb, paralysis or your Death.

Accidental Death Benefit (ADB)

Coverage against accidental Death usually payable in addition to base amount of coverage.

Accidental Dismemberment: (Credit Insurance)

Provides additional financial security should an insured person be dismembered or lose the use of a limb as the result of an accident.

Account Value

The sum of all the interest options in your policy, including interest.

Accrued Income

Income that has been earned but not yet received. For instance, if you have a non-registered Guaranteed Investment Certificate (GIC), Mutual Fund or Segregated Equity Fund, growth accrues annually or semi-annually and is taxable annually even though the gain is only paid at maturity of your investment.

Accumulated Value

An amount of money invested plus the interest earned on that money.

Allowance

A sum of money set aside in the construction contract for items which have not been selected and specified in the construction contract. For example, selection of tile as a flooring may require an allowance for an underlayment material, or an electrical allowance which sets aside an amount of money to be spent on electrical fixtures.

Americans with Disabilities Act

The Americans with Disabilities Act which gives civil rights protection to individuals with disabilities similar to those provided to individuals on the basis of race, color, sex, national origin, age, and religion. It guarantees equal opportunity for individuals with disabilities in public accommodations, employment, transportation, State and local government services, and telecommunications.

Amortization (Credit Insurance)

Refers to the reduction of debt by regular payments of interest and principal in order to pay off a loan by maturity.

Annual Premium

Yearly amount payable by a client for a policy or component.

Applicant

The party applying for an Insurance policy.

Application

A signed statement of facts made by a person applying for life Insurance and then used by the Insurance company to decide whether or not to issue a policy. The application becomes part of the Insurance contract when the policy is issued.

Appraisal Value

An estimate of the market Value of the property.

Area Walls

Corrugated metal or concrete barrier walls installed around a basement window to hold back the earth.

Assessed value

The dollar Value of an asset assigned by a public tax assessor for the purposes of taxation.

aterial used to cover the interior framed areas of walls and ceilings

Automatic Benefits Payment

Automatic payment of moneys derived from a benefit.

Automatic Waiver of Premium

A benefit that automatically forfeits premium payments.

Ballast

A transformer that steps up the voltage in a florescent lamp.

Balloon

A loan that has a series of Monthly payments with the remaining balance due in a large lump sum payment at the end.

Balloon Framed Wall

Framed walls (generally over 10' tall) that run the entire vertical length from the floor sill plate to the roof. This is done to eliminate the need for a gable end truss.

Basement Foundation

A basement is a usable foundation that typically has ceiling heights of 8' and is often finished off as living or storage space.

Beneficiary (Credit Insurance)

The person or party designated to receive proceeds entitled by a benefit. Payment of a benefit is triggered by an event. In the case of credit Insurance, the beneficiary will always be the creditor.

Benefit Value

The amount of cash payable on a benefit.

Borrower (Credit Insurance)

A consumer who borrows money from a lender.

Builder's Risk Insurance

Insurance coverage on a construction project during construction, including extended coverage that may be added for the contract for the customer's protections.

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.

Bull Nose Drywall

Rounded drywall corners.

Buy/Sell Agreement

This is an agreement entered into by the owners of a business to define the conditions under which the interests of each shareholder will be bought and sold. The agreement sets the Value of each shareholders interest and stipulates what happens when one of the owners wishes to dispose of his/her interest during his/her lifetime as well as disposal of interest upon Death or disability. life Insurance, critical illness coverage and disability Insurance are major considerations to help fund this type of agreement.

Canada Mortgage and Housing Corporation (CMHC)

The National Housing Act (NHA) authorized canada Mortgage and Housing Corporation (CMHC) to operate a Mortgage Insurance Fund which protects NHA Approved Lenders from losses resulting from borrower default.

Canada Pension Plan (CPP)

A plan that provides retirement and long term disability Income benefits to residents of canadian provinces (excluding Quebec).

Canadian Deposit Insurance Corporation

Better known as CDIC, this is an organization which insures qualifying Deposits and GICs at savings institutions, mainly banks and trust companys, which belong to the CDIC for amounts up to $60,000 and for terms of up to five years. Many types of Deposits are not insured, such as mortgage-backed Deposits, annuities of duration of more than five years, and mutual funds.

Canadian Life and Health Insurance Association (CLHIA)

An association of most of the life and Health Insurance companies in canada that conducts research and compiles information about the life and Health Insurance industry in canada.

Cantilever

A projecting structure supported on one end, such as a balcony.

Captive Agent

A licensed Insurance agent who sells Insurance for only one company.

Cash reserves

The money the buyer has left over after the down payment and all those closing costs.

Cash Surrender Value

This is the amount available to the owner of a life Insurance policy upon voluntary termination of the policy before it becomes payable by the Death of the life insured. This does not apply to term Insurance but only to those policies which have reduced paid up Values and cash surrender Values. A cash surrender in lieu of Death benefit usually has tax implications.

Cash Surrender Value

Benefit that entitles a policy owner to an amount of money upon cancellation of a policy.

Cavity

The empty space between studs or joists to place insulation batts.

Certificate of Location or Survey

A document specifying the exact location of the building on the property and describing the type and size of the building including additions, if any.

Certificate of Search or Abstract of Title

A document setting out instruments registered against the title to the property, e.g. deed, mortgages, etc.

Child Insurance Rider (CIR)

Insurance or insurability provided on current or future children of insured.

CMHC or GEMICO Insurance Premium

Mortgage Insurance insures the lender against loss in case of default by the borrower. Mortgage Insurance is provided to the lender by CMHC or GEMICO and the premium is paid by the borrower.

Co-insurance

In medical Insurance, the insured person and the insurer sometimes share the cost of services under a policy in a specified ratio, for example 80% by the insurer and 20% by the insured. By this means, the cost of coverage to the insured is reduced.

Commercial Business Loan (Credit Insurance)

An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes.

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.

Crawlspace Foundation

The space between the ground and the first floor of a home, usually no higher than four feet.

Creditor (Credit Insurance)

A lender or lending institution that offers financing and loans to a borrower, for the purpose of acquiring a commodity.

Creditor Proof Protection

The creditor proof status of such things as life Insurance, non-registered life Insurance investments, life Insurance RRSPs and life Insurance RRIFs make these attractive products for high net worth individuals, professionals and business owners who may have creditor concerns. Under most circumstances the creditor proof rules of the different provincial Insurance acts take priority over the federal bankruptcy rules.
The provincial Insurance acts protect life Insurance products which have a family class beneficiary. Family class beneficiaries include the spouse, parent, child or grandchild of the life insured, except in Quebec, where creditor protection rules apply to spouse, ascendants and descendants of the insured. Investments sold by other financial institutions do not offer the same security should the holder go bankrupt. There are also circumstances under which the creditor proof protections do not hold for life Insurance products. federal bankruptcy law disallows the protection for any transfers made within one year of bankruptcy. In addition, should it be found that a person shifted money to an Insurance company fund in bad faith for the specific purpose of avoiding creditors, these funds will not be creditor proof.

Critical Illness Insurance

Coverage that provides a lump-sum payment should you be diagnosed with a critical illness and survive a pre-determined period of time. There are no restrictions on how you use your benefit.

Critical Illness Insurance (Credit Insurance)

Coverage that provides a lump-sum payment should you become seriously ill with a specified illness. The payment is made to your creditors to pay off your debt owing.

Daily Interest Accumulation

Account in which interest is accrued daily and credited to the account at the end of a specified time.

Dead Peasants Insurance

also known as "Dead Janitors Insurance", this is the practice, where allowed, in several U.S. states, of numerous well known large American Corporations taking out corporate owned life Insurance policies on millions of Their regular employees, often without the knowledge or consent of those employees. Corporations profiting from the Deaths of Their employees [and sometimes ex-employees] have attracted adverse publicity because ultimate Death benefits are seldom, even partially passed down to surviving families.

Death Benefit

Amount paid on Death of an insured.

Debt (Credit Insurance)

Money, goods or services that someone is obligated to pay someone else in accordance with an expressed or implied agreement. Debt may or may not be secured.

Deed (Certificate of Ownership)

The document signed by the seller transferring ownership of the home to the purchaser. This document is then registered against the title to the property as evidence of the purchaser's ownership of the property.

Deposit

A sum of money Deposited in trust by the purchaser when making an offer to be held in trust by the vendor's agent, broker, lawyer or notary until the closing of the transaction.

Disability Insurance

Insurance that pays you an ongoing Income if you become disabled and are unable to pursue employment or business activities. There are limits to how much you can receive based on your pre-disability earnings. Rates will vary based on occupational duties and length of time in a particular industry. This kind of coverage has a waiting period before you can begin collecting benefits, usually 30, 60 or 90 days. The benefit paying period also varies from 2 years to age 65. A short waiting period will cost more that a longer waiting period. As well, a long benefit paying period will cost more than a short benefit paying period.

Disability Insurance (Credit Insurance)

Group Insurance designed to cover Monthly obligations due to a borrower being unable to work due to sickness or injury.

Diversification

Investing so that all your eggs are not in the same basket. By spreading your investments over different kinds of investments, you cushion your portfolio against sudden swings in any one area. Segregated equity funds have become a popular and secure way for average investors to get the benefits of greater diversification.

Dividend

As the term dividend relates to a corporation's earnings, a dividend is an amount paid per share from a corporation's after tax profits. Depending on the type of share, it may or may not have the right to earn any dividends and corporations may reduce or even suspend dividend payments if they are not doing well. Some dividends are paid in the form of additional shares of the corporation. dividends paid by canadian corporations qualify for the dividend tax credit and are taxed at lower rates than other Income.
As the term dividend relates to a life Insurance policy, it means that if that policy is "participating", the policy owner is entitled to participate in an equitable distribution of the surplus earnings of the Insurance company which issued the policy. Surpluses arise primarily from three sources:
1) the difference between anticipated and actual operating Expenses,
2) the difference between anticipated and actual claims experience, and
3) interest earned on investments over and above the rate required to maintain policy reserves. Having regard to the source of the surplus, the "dividend" so paid can be considered, in part at least, as a refund of part of the premium paid by the policy owner.
life Insurance policy owners of participating policies usually have four and sometimes five dividend options from which to choose:
1) take the dividend in cash,
2) apply the dividend to reduce current premiums,
3) leave the dividends on Deposit with the Insurance company to accumulate at interest like a savings plan,
4) use the dividends to purchase paid-up whole life Insurance to mature at the same time as the original policy,
5) use the dividends to purchase one year term Insurance equal to the guaranteed cash Value at the end of the policy year, with any portion of the dividend not required for this purpose being applied under one of the other dividend options.
NOTE: It is suggested here that if you have a participating whole life policy and at the time of purchase received a "dividend projection" of incredible future savings, ask for a current projection. life Insurance company's surpluses are not what they used to be.

Dividend

Unlike dividends which are paid to company shareholders, participating Insurance policy dividends are not based on the company's overall profits. Rather, they are determined by grouping policies by type and country of issue and looking at how each class contributes to the company's earnings and surplus.

Dividend Policy

This policy governs canada life's actions regarding distribution of dividends to policyholders. It's goal is to achieve a dividend distribution that is equitable and timely, and which gives full recognition of the need to ensure the ongoing solidity of the company. It also specifies that distribution to individual policyholders must be equitable between dividend classes and policyholder generations, and among policyholders within any class.

Earnest money

A Deposit made by potential home buyers during negotiations with the seller. The sum shows a seller that a buyer is serious about purchasing the property. The money usually is counted toward the down payment.

Electrical Rough

Work performed by the Electrical Contractor after the plumber and heating contractor are complete with Their phase of work. Normally all electrical wires, and outlet, switch, and fixture boxes are installed (before insulation).

Electrical Service Panel

Refers to the high-voltage electrical system's first point of entry into a home beyond the meter.

Equity-based insurance

life Insurance or annuity product in which the cash Value and benefit level fluctuate according to the performance of an equity portfolio.

Errors and Omissions Insurance

Insurance coverage purchased by the agent/broker which provides protection against loss incurred by a client because of some negligent act, error, oversight, or omission by the agent/broker.

Fiat Money

Fiat Money is paper currency made legal tender by law or fiat. It is not backed by gold or silver and is not necessarily redeemable in coin. This practice has had widespread use for about the last 70 years. If governments produce too much of it, there is a loss of confidence. Even so, governments print it routinely when they need it. The Value of fiat money is dependent upon the performance of the economy of the country which issued it. canada's currency falls into this category.

Fire Insurance

before a mortgage can be advanced, the purchaser must have arranged fire Insurance. A certificate or binder from the Insurance company may be required on closing.

Forced Air Heating

A common form of heating with natural gas, propane, oil or electricity as a fuel. Air is heated in the furnace and distributed through a set of metal ducts to various areas of the house.

Gable End Wall

The triangular end of an exterior wall above the eaves formed under a gable roof.

GFI -See Ground Fault Current Interrupter

Gross Household Income

Gross household Income is the total salary, wages, commissions and other assured Income, before deductions, by all household members who are co-applicants for the mortgage.

Ground Fault Current Interrupter

An electrical device used to prevent injury from contact with faulty electrical appliances and faulty wiring
electrical shocks. GFIs should not be confused with AFIs, the later are designed to prevent electrical fires. GFIs are required in new home bathrooms, kitchen, garage, out of doors and in other locations where one might be in contact with a grounded surface or body of water and an electrical appliance. Most GFI's are located in the receptacle itself or a curcuit breaker and can be identified by the presence of a 'test' and a 'reset' button.

Group Life Insurance

This is a very common form of life Insurance which is found in employee benefit plans and bank mortgage Insurance. In employee benefit plans the form of this Insurance is usually one year renewable term Insurance. The cost of this coverage is based on the average age of everyone in the group. Therefore a group of young people would have inexpensive rates and an older group would have more expensive rates.
Some people rely on this kind of Insurance as Their primary coverage forgetting that group life Insurance is a condition of employment with Their employer. The coverage is not portable and cannot be taken with you if you change jobs. If you have a change in Health, you may not qualify for new coverage at your new place of employment.
Bank mortgage Insurance is also usually group Insurance and you can tell this by virtue of the fact that you only receive a certificate of Insurance, and not a complete policy. The only form in which bank mortgage Insurance is sold is reducing term Insurance, matching the declining mortgage balance. The only beneficiary that can be chosen for this kind of Insurance is the bank. In both cases, employee benefit plan group Insurance and bank mortgage Insurance, the coverage is not guaranteed. This means that coverage can be cancelled by the Insurance company underwriting that particular plan, if they are experiencing excessive claims.

Guaranteed Interest Certificate (GIC)

Interest bearing investment with fixed rate and term.

Income Splitting

This is a tax planning strategy of arranging for Income to be transferred to family members who are in lower tax brackets than the one earning the Income, thus reducing taxes. Even though attribution rules limit Income splitting, there are still a number of legitimate ways to do so, such as through the use of spousal RRSPs.

Individual Insurance

Insurance that is offered to individuals rather than groups.

Insurance Act

In canada, a general statute that contains most of the Insurance law of a common law province, and regulates the conduct of insurers and Insurance agents within the province.

Insurance Policy (Credit Insurance)

A policy under which the Insurance company promises to pay a benefit of the person who is insured.

Irrevocable Beneficiary

Legal designation that cannot be contested. (See beneficiary)

Job Loss Insurance (Credit Insurance)

Coverage that can pay down your debt should you become involuntarily unemployed. The payment is made to your creditors to reduce your debt owing.

Joint Policy Life

one Insurance policy that covers two lives, and generally provides for payment at the time of the first insured's Death. It could also be structured to pay on second Death basis for estate planning purposes.

Knee Wall

A wall-like structure that supports roof rafters.

Lease (Credit Insurance)

Contract granting use of real estate, equipment or other fixed assets for a specified period of time in exchange for payment. The owner or a leased property is the lessor and the user the lessee.

Lender (Credit Insurance)

Individual or firm that extends money to a borrower with the expectation of being repaid, usually with interest. Lenders create debt in the form of loans. Lenders include financial institutions, leasing companies government lending agencies and automobile dealers.

Level Premium

A premium that remains unchanged throughout the life of a policy

Level Premium Life Insurance

This is a type of Insurance for which the cost is distributed evenly over the premium payment period. The premium remains the same from year to year and is more than actual cost of protection in the earlier years of the policy and less than the actual cost of protection in the later years. The excess paid in the early years builds up a reserve to cover the higher cost in the later years.

Life Expectancy

The average number of years of life remaining for a group of people of a given age and gender according to a particular mortality table.

Life Income Fund

Commonly known as a LIF, this is one of the options available to locked in Registered Pension Plan (RPP) holders for Income payout as opposed to Registered Retirement Savings Plan (RRSP) holders choice of payout through Registered Retirement Income Funds (RRIF). A LIF must be converted to a unisex annuity by the time the holder reaches age 80.

Life Insurance

Insurance that provides protection against an economic loss caused by Death of the person insured.

Life Insurance (Credit Insurance)

Group Term life Insurance that pays or reduces the balance due on a loan if the borrower dies before the loan is repaid.

Life Insured

The person who's life is protected by an individual policy.

Life Underwriter

Insurance Agent.

Living Will

This is a will which specifically expresses the testator's desire not to be kept alive on life support machines, should the occasion arise.

Load-Bearing Wall

includes all exterior walls and any interior wall that is aligned above a support beam or girder. Normally, any wall that has a double horizontal top plate.

Medical Information Bureau

This organization was established in 1902. The Medical Information Bureau (M.I.B.) is a non-profit association of life Insurance companies. Its purpose is to detect and deter fraud by providing warnings called, alerts, to member companies. For example, if an Insurance applicant advised one Insurance company of a heart attack and then applied to another Insurance company omitting this history, codes, reported by the first Insurance company, indicating a heart attack would alert the second Insurance company to the undisclosed history. It is a rarity, however, that the alert is the only notice of a specific medical impairement as most applicants completely disclose Their history.

Metal Insulation Support

16" or 24" wire rod or crisscrossed wire to hold floor insulation in place.

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