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GLOSSARY

339

Personal property Generally, any property other than real estate.

Policyholder The owner of an insurance policy. This person may or may not be the person covered by the policy.

Portfolio All assets held by a mutual fund at any specific time, and thus, held by the shareholders. Also, the total investments held by an individual.

Preexisting condition Any physical or mental impairment that a person has at the time that he or she is applying for an insurance policy. Some policies, if approved, will then exclude any coverage related to that impairment.

Principal The amount of money that is financed, borrowed, or invested.

Qualified retirement plan A plan sponsored by an employer to provide retirement benefits for employees, that meets certain regulatory require- ments. The employer may deduct contributions to the plan, and the employees do not include benefits in their taxable income until received, usually after they have retired. Also, this term refers to the type of accounts that receive beneficial tax treatment by the government, such as IRAs.

Roth IRA A type of IRA in which the principal grows tax-deferred and all withdrawals may be made tax free.

Security An investment of money in a common enterprise with the expectation of profit from the effort of others.

Standard deduction A fixed deduction that depends on the taxpayer’s filing status, age, and vision. A taxpayer who doesn’t have sufficient item- ized deductions can take this.

Tenancy in common A form of co-ownership. Upon the death of a co- owner, interest passes to the estate and not the surviving owner or owners.

Term insurance A form of insurance that provides a “no frills” approach to protection. Term insurance only provides a death benefit. There is neither an accumulation of cash value, nor an increase in the death benefit due to investment choices. Insurance coverage only lasts as long as the specified term, unless the policyholder chooses to renew his or her policy.

Thrift and savings plan A retirement plan granted by an employer to supplement pension benefits, as well as other types of benefits, in which the employer makes a contribution in proportion to what the employee contributes.

Trust A legal arrangement by which title to property is given to one party who manages it for the benefit of a beneficiary or beneficiaries.

Trustee The person or persons who act on behalf of a trust.

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