-
Technical Product Design
- The phase in the product development process in which a product's financial structure is created.
- Also known as financial design or product design
.
-
Cost of Benefits
For an ins or annuity product, the value of the contractually required benefits that the product promises to pay.
AKA the cost of insurance.
-
Mortality
The incidence of death in a specified group of people.
-
Interest Spread
Represents the element of profit that insurers hope to earn from their investment operations; found by subtracting the interest-crediting rate from the interest rate earned. AKA interest margin.
-
Basis Point
1/100th of a percent, or .0001
-
Model
A system that simulates something else - in product design, a system that simulates an insurance or annuity product.
-
Adverse Deviation
In product operations, a difference b/t actual & assumed product values that produces a decrease in actual product profitability relative to assumed product profitability.
-
Favorable Deviation
In product operations - a difference b/t actual & assumed product values that produces an increase in actual product profitability relative to assumed product profitability.
-
Interest Rate
The percentage by which an amount of money is multiplied to derive the amount that is paid for the use of that money.
-
Principal
The original amt of money upon which interest is calculated.
-
Simple Interest
Interest that is applied only to the principal amt of an investment.
-
Compound Interest
Interest earned on both the principal and accumulated interest.
-
Nominal Interest Rate
The named interest rate for a particular investment.
-
Effective Interest Rate
The type of interest rate that includes the effects of compounding.
-
Time Value of Money
A concept which states that the value of a sum of money will change over time as a result of the effects of interest.
-
Present Value (PV)
For a sum of money, the amount that, if invested at a specified interest rate on a specified date, would grow to equal a specified future amount.
-
Future Value (FV)
For a sum of money, the amount that an original sum is expected to be worth at a specified future date, given a specified interest rate.
-
Future Value Interest Factor (FVIF)
The future value of $1.00 at a given interest rate for a stated number of periods.
-
Annuity
For the purposes of financial analysis, any series of equal payments made at regular intervals over a specified period of time.
-
Ordinary Annuity
An annuity where the payments are made at the end of each payment period.
Can make more money on an annuity due, because you get the $ sooner & have longer to invest it.
-
Annuity Due
annuity where payments are made at the beginning of each payment period.
more money to invest for longer
-
Present Value Interest Factor (PVIF)
The present value of $1.00 discounted at a given interest rate for a stated number of periods.
|
|