ACTUAL DEATH STRAIN
The actual total DEATH STRAIN for a block of policies during a given year. If the actual death strain exceeds the EXPECTED DEATH STRAIN there is a mortality loss.

AMORTISATION
Paying off a debt over a period of time by a series of payments.

ANNUITANT
An individual receiving payments from an ANNUITY.

ANNUITY
A regular series of payments. Annuities include annuities certain, where payments are made at definite times, and life annuities, where payments depend on the survival of an ANNUITANT.

ASSET
Anything that has a financial value. Examples include: buildings, equipment, shares.

ASSURANCE
A benefit payable on death. See also: LIFE ASSURANCE.

ASSURED LIFE
An individual whose life is covered by a life assurance policy.

BASIS
The set of assumptions (eg mortality rates, interest rates, price inflation) used in an actuarial
calculation. A strong basis is one that leads to conservative (je high) estimates of liabilities.
Conversely, a weak basis will give low estimates of the value of liabilities.

BENEFIT
A payment or series of payments made under specified circumstances from an insurance policy or pension scheme.

BOND
A fixed interest security.

BONUS
An additional benefit in excess of the basic benefit, paid from a WITH PROFIT POLICY.

CANCELLATION
Termination of a general insurance policy by the policyholder (usually during the period of cover).

CAPITAL GAINS TAX
Tax payable on the increase in the capital value of an asset between the time of purchase and the time of sale.

CAPITAL REDEMPTION POLICY
A regular premium policy that provides a lump sum benefit on maturity. Such policies may be used in conjunction with interest-only loans.

CASH
Investment in a short term deposit account.

CLAIM
A request for payment submitted by a policyholder under the terms of an insurance contract.

CLAIM EVENT
An event that gives rise to a claim (eg a car accident or a fire).

CLAIM FREQUENCY
The average number of claims submitted per policy during a given period of time. -CLAIMS EXPERIENCE
The number and amount of claims experienced by an insurance company over a defined period.
CLASS (OF BUSINESS)
A type of insurance cover eg term assurance, whole life annuity, private motor insurance etc.

COMMERCIAL LINES
Classes of insurance providing cover for businesses, as opposed to PERSONAL LINES.

COMMERCIAL PROPERTY INSURANCE
Commercial property insurance provides protection to businesses against damage to buildings (eg fire, vandalism).

COMMISSION
A payment made to a broker or sales agent in return for acquiring new business. See also:
EXPENSES.

COMPOSITE INSURER
An insurer that writes both life assurance and general insurance business.

COMPOUND INTEREST
A method of crediting interest where the interest is added to the accumulated fund, so that the interest itself earns interest. See also: SIMPLE INTEREST.

CONVENTIONAL POLICY
A traditional non-profit or with-profit policy, as opposed to a UNIT LINKED POLICY.

CORPORATION TAX
A tax payable by companies, based on their profits. Currently the basic rate of Corporation Tax is 33% of trading profits in the UK. Paid in two components: advance corporation tax (ACT) and mainstream corporation tax.

CUM DIVIDEND
A share or bond is bought/sold cum dividend (je with attaching dividend) if the buyer is entitled to receive the next dividend or coupon. Opposite of EX DIVIDEND.