This glossary covers terms related to retirement (including financial, insurance, legal and estate planning) and elder care. (For terms related to Medicare, click on Medicare Glossary.) To reduce download time, we have divided the Glossary into the following sections. Simply click on the section you want to see.
| A | B | C | D | E-F | G | H | I | J-L | M-N | O-P | Q-R | S | T-Z |
Tax Basis The value of an asset for income tax purposes. This varies by the asset, the means by which it was acquired, its original purchase price, and the amount of its depreciation.
Tax-Qualified Long-Term Care Insurance See Qualified Long-Term Care Insurance Policy.
Telephone Reassurance Calls made by agencies or volunteers to an elderly person to check up on them and offer reassurance, contact and socialization. The calls are typically made at a predetermined time each day.
Term Life Insurance Covers a person for a period of one or more years. It pays a death benefit only if you die during that term. It generally does not build a cash value.
Testate Dying with a legally valid will.
Testator The person who makes a will.
Third Party Notice A provision that lets you name someone who the insurance company would notify if your coverage is about to end because the premium hasn't been paid. This can be a relative, friend, or professional such as a lawyer or accountant, for example.
Time Value of Money A dollar received today is worth more than a dollar received in the future, because today's dollar can earn interest up to the time the future dollar is received. Conversely, a dollar to be received in the future is worth less than a dollar received today because (1) inflation between now and when the future dollar is received will reduce the purchasing power of that future dollar, and (2) the future dollar cannot earn interest until it is received. Therefore, provided it can earn interest, any amount of money is worth more the sooner it is received.
For example, assuming a 5% interest rate, $100 invested today will be worth $105 in one year. On the other hand, $100 received one year from now is only worth $95.24 today, at the same 5% interest rate.
Toileting The fifth activity of daily living - Getting to and from the toilet, getting on and off the toilet and performing associated personal hygiene.
Trade A transaction in which one party buys a stock, bond or other investment from another party. Once a trade is consummated, it is considered "done" or final. Settlement occurs 1-5 business days later.
Transferring The sixth activity of daily living - Moving into and out of a bed, chair or wheelchair.
Treasury Bills The U.S. government issues Treasury Bills, Treasury Notes, and Treasury Bonds. Treasury Bills are issued with 3 month, 6 month and 1 year maturities. They are sold at a discount from their face value, the amount of discount determined by the interest rate to be earned from purchase to maturity. Bills do not pay interest periodically. Instead, they are redeemed for their face value at maturity.
Treasury Bonds and Notes Issued by the U.S. government, they have maturities of 2 years, 3 years, 5 years, 10 years and 30 years. They all pay interest every 6 months. Notes mature in 10 years or less; the 30-year issue is called a bond. The most recently issued 30-year bond is called "the long bond."
Trigger see Benefit Trigger.
Trust A legal arrangement where a person (the grantor) gives control of his or her property to a trust which is administered by an individual or institution (the trustee) for the benefit of one or more beneficiaries. The grantor, trustee and beneficiary may be the same person. The grantor names a successor trustee in the event of incapacitation or death, as well as successor beneficiaries. Trusts are created for a wide variety of reasons such as avoiding probate, providing a protected stream of income should the grantor or beneficiary become incapacitated, and shielding assets from spendthrift heirs. Assets and other property that a person wants to move to a trust, such as real estate and bank or brokerage accounts, must be retitled so that the trust becomes the owner. For more information, visit How Living Trusts Avoid Probate.
Trustor The person who creates a trust; also called a grantor.
TTY A text telephone system that allows a hearing-impaired user to type messages to another person and read responses on a small screen. Similar to today's text messaging, a "read only" conversation can exist between two people who each use TTY equipment. Otherwise, a non-hearing-impaired caller can use a relay service where a special operator acts as a go-between to translate the speaker's words into text and text print into voice communication.
12b-1 Fees The annual charge (expressed as a percentage) deducted from a mutual fund's assets to pay marketing and distribution expenses. The amount of the fee is stated in the fund's prospectus. Most mutual funds with 12b-1 fees larger than 0.25% are classified as a load fund. A fund is allowed to claim it is a "no-load fund" as long as its 12b-1 fee is 0.25% or less per year. A true no load fund has neither a sales charge nor a 12b-1 fee.
Umbrella Personal Liability Insurance Policy An insurance policy that extends the coverage limits of standard personal insurance policies, such as homeowners, boatowners, auto, tenants (renters) insurance, etc. Specifically, an umbrella policy provides an extra level of protection against a large jury award that is not covered in a standard policy.
Underwriting The process of examining, accepting, or rejecting insurance applications, and classifying those people who are accepted, in order to charge the proper premium for each person.
Universal Life Insurance A flexible type of policy that lets you periodically adjust your premium payments and the amount of your coverage.
Variable Life Insurance A life insurance policy that allows you to allocate a portion of your premiums to a separate account comprised of various investment funds within the insurance company's portfolio, such stocks, bonds, equity funds, money market funds, and bond funds. The death benefit amount will be determined by the insured person's portfolio market value at the time of death. Purchasers of these policies hope that investment gains will increase their death benefit and cash values more effectively than other types of policies. While most variable life insurance policies guarantee that the death benefit will not fall below a specified minimum, they make no other guarantees.
Viatical Settlement A financial arrangement in which someone with a terminal disease sells his or her life insurance policy for a lump sum cash payment, the amount of which is at a discount from the policy's face value. The buyer cashes in the full amount of the policy when the insured person dies.
Waiting Period see Elimination Period.
Waiver of Premium If a policy contains this provision, premiums don't have to be paid while an insured person is incapacitated.
Will A written document through which a person disposes of property after death. An interesting article is Do I Need a Lawyer to Make My Will?
Whole Life Insurance Policies that build a cash value and cover a person for as long as he or she lives if premiums continue to be paid.
Yield to Maturity The annual rate of return anticipated on a bond if it is held until its maturity date. The Yield-to-Maturity calculation is based on the current market price, par value, coupon interest rate, and length of time to maturity. It assumes that coupon interest paid over the life of the bond will be reinvested at the same rate.
Zero Coupon Bonds These bonds do not pay interest during the life of the bond. Instead, just like U.S. Savings Bonds, they are bought at a discount to their maturity value. For example, you might pay $700 today to get back $1,000 in 5 years when the bond matures.