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Unified gifts/transfers to minors The Uniform Gifts to Minors Act (UGMA) and Uniform Transfers to Minors Act (UTMA) are state laws that enable gifts to be made to minors. An adult is designated a “custodian” of the property. The minor, however, is the owner of the property, pays taxes on the earning generated by the property, and has an unrestricted right to use it upon the age at which the custodianship terminates (usually 18 or 21, depending upon the state).

Universal life insurance A combination of term insurance and an investment account. The investment account grows at a specified interest rate, which in turn goes towards the purchase of death protection. Univer- sal life differs from whole life in that the premium is split between admin- istration fees and the investment account.

Variable universal life insurance Life insurance where the death bene- fit is, for the most part, tied to the results of the separate investments that support the policy’s payment obligations.

Vesting An employee’s nonforfeitable rights to receive the pension bene- fits, or other retirement account benefits, based on his or her own and the employer’s contributions.

Wealth The total value of all items owned by an individual, such as bonds, stocks, bank accounts, home, and automobile.

Whole life insurance A type of life insurance that provides a cash value that goes along with the insurance coverage and death protection. This type of policy covers an individual for his or her entire life unless the pol- icy is surrendered prior to the insured’s death.

Yield The current cash income produced by an investment. For example, bonds provide income in the form of interest, and stocks in the form of dividends.

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