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Affinity Wealth Solutions Glossary of Commonly Used Financial and

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					Affinity Wealth Solutions
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            Glossary of Commonly Used Financial and Insurance Terms

401(k) Plan
A defined contribution plan that may be established by a company for retirement. Employees may
allocate a portion of their salaries into this plan, and contributions are excluded from their income for
tax purposes (with limitations). Contributions and earnings will compound tax deferred. Withdrawals
from a 401(k) plan are taxed as ordinary income, and may be subject to an additional 10 percent federal
tax penalty if withdrawn prior to age 59½.

403(b) Plan
A defined contribution plan that may be established by a nonprofit organization or school for
retirement. Employees may allocate a portion of their salaries into this plan, and contributions are
excluded from their income for tax purposes (with limitations). Contributions and earnings will
compound tax deferred. Withdrawals from a 403(b) plan are taxed as ordinary income and may be
subject to an additional 10 percent federal tax penalty if withdrawn prior to age 59½.

457 Plan An arrangement that allows state and local governments and their employees to make
contributions to a tax-deferred retirement savings plan established for the benefit of employees.

Accidental Death And Dismemberment Insurance
A rider attached to a life or health insurance policy. AD&D covers death by accidental means (rather
than natural causes) and dismemberment, which includes loss of the use of certain body parts (including
limbs or eyesight.)

These riders are usually written in such a way that the insurer must pay double the amount payable
otherwise, or a specific amount of continuous income payments, and are sometimes called double
indemnity riders. AD&D insurance is often offered by employers as an extra option on group health
plans.

Accelerated Death Benefit
A benefit that can be attached to a life insurance policy that enables the policy holder to receive cash
advances against the death benefit in the case of being diagnosed with a terminal illness. Many
individuals who choose the accelerated death benefit have less than one year to live and use the money
for treatments and other costs needed to stay alive.

Acceleration Clause
The part of a contract that says when a loan may be declared due and payable.

Accidental Death Benefit
In a life insurance policy, benefit in addition to the death benefit paid to the beneficiary, should death
occur due to an accident. There can be certain exclusions as well as time and age limits.


                                                                                                                 Page 1
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
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Active Participant
Person whose absence from a planned event would trigger a benefit if the event needs to be canceled
or postponed.

Activities of Daily Living
Bathing, preparing and eating meals, moving from room to room, getting into and out of beds or chairs,
dressing, using a toilet.

Actual Cash Value
Cost of replacing damaged or destroyed property with comparable new property, minus depreciation
and obsolescence. For example, a 10-year-old sofa will not be replaced at current full value because of a
decade of depreciation.

Actuary
 A specialist in the mathematics of insurance who calculates rates, reserves, dividends and other
statistics. (Americanism: In most other countries the individual is known as "mathematician.")

Adjusted Gross Income (AGI)
An interim calculation in the computation of income tax liability. It is computed by subtracting certain
allowable adjustments from gross income.

Adjustable Rate
An interest rate that changes, based on changes in a published market-rate index.

Adjuster
A representative of the insurer who seeks to determine the extent of the insurer's liability for loss when
a claim is submitted.

Administrator
A person appointed by the court to settle an estate when there is no will.

Admitted Assets
 Assets permitted by state law to be included in an insurance company's annual statement. These assets
are an important factor when regulators measure insurance company solvency. They include mortgages,
stocks, bonds and real estate.

After-Tax Return
The return from an investment after the effects of taxes have been taken into account.

Agent
individual who sells and services insurance policies in either of two classifications:
Independent agent represents at least two insurance companies and (at least in theory) services clients
by searching the market for the most advantageous price for the most coverage. The agent's
commission is a percentage of each premium paid and includes a fee for servicing the insured's policy.

                                                                                                                 Page 2
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
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Direct or career agent represents only one company and sells only its policies. This agent is paid on a
commission basis in much the same manner as the independent agent.




                                                                                                                 Page 3
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™



Aggregate Limit
 Usually refers to liability insurance and indicates the amount of coverage that the insured has under the
contract for a specific period of time, usually the contract period, no matter how many separate
accidents might occur.

Aggressive Growth Fund
A mutual fund whose primary investment objective is substantial capital gains.

Alternative Minimum Tax
A method of calculating income tax that disallows certain deductions, credits, and exclusions. This was
intended to ensure that individuals, trusts, and estates that benefit from tax preferences do not escape
all federal income tax liability. People must calculate their taxes both ways and pay the greater of the
two.

Annual Crediting Cap
The maximum rate that the equity-indexed annuity can be credited in a year. If a contract has an upper
limit, or cap, of 7 percent and the index linked to the annuity gained 7.2 percent, only 7 percent would
be credited to the annuity.

Annual Administrative Fee
Charge for expenses associated with administering a group employee benefit plan.

Annuitant
A person who will receive annuity benefits and whose lifetime is used to measure the length of time
periodic income payments are payable under an annuity contract.

Annuitization
The process in which an annuity is paid out according to the annuity option the policy owner has
selected.

Annuitization Options
Different choices available in order to annuitize an annuity. For example, life with a 10-year period
certain means payouts will last a lifetime, but should the annuitant die during the first 10 years, the
payments will continue to beneficiaries through the 10th year. Selection of such an option reduces the
amount of the periodic payment.

Annuity
An insurance-based contract that provides future payments at regular intervals in exchange for current
premiums. Annuity contracts are usually purchased from banks, credit unions, brokerage firms, or
insurance companies. Any guarantees are contingent on the claims-paying ability of the issuing
company.

Approved for Reinsurance

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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
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 Indicates the company is approved (or authorized) to write reinsurance on risks in this state. A license
to write reinsurance might not be required in these states.


Approved or Not Disapproved for Surplus Lines
Indicates the company is approved (or not disapproved) to write excess or surplus lines in this state.

Asset
Any item of economic value owned by an individual or corporation, especially that which could be
converted to cash. Examples are cash, securities, accounts receivable, inventory, office equipment, real
estate, a car, and other property. On a balance sheet, assets are equal to the sum of liabilities, common
stock, preferred stock, and retained earnings. From an accounting perspective, assets are divided into
the following categories: current assets (cash and other liquid items), long-term assets (real estate,
plant, equipment), prepaid and deferred assets (expenditures for future costs such as insurance, rent,
interest), and intangible assets (trademarks, patents, copyrights, goodwill).

Attained Age
Insured's age at a particular time. For example, many term life insurance policies allow an insured to
convert to permanent insurance without a physical examination at the insured's then attained age.
Upon conversion, the premium usually rises substantially to reflect the insured's age and diminished life
expectancy.

Authorized Under Federal Products Liability Risk Retention Act (Risk Retention Groups)
 Indicates companies operating under the Federal Products Liability Risk Retention Act of 1981 and the
Liability Risk Retention Act of 1986.

Automobile Liability Insurance
Coverage if an insured is legally liable for bodily injury or property damage caused by an automobile.

Balanced Mutual Fund
A mutual fund whose objective is a balance of stocks and bonds. Balanced funds tend to be less volatile
than stock-only funds.

Balance Sheet
An accounting term referring to a listing of a company's assets, liabilities and surplus as of a specific
date.

Bear Market
When the stock market appears to be declining overall, it is said to be a bear market.

Beneficiary
A person named in a life insurance policy, annuity, will, trust, or other agreement to receive a financial
benefit upon the death of the owner. A beneficiary can be an individual, company, Benefit Period- In
health insurance, the number of days for which benefits are paid to the named insured and his or her


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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
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dependents. For example, the number of days that benefits are calculated for a calendar year consist of
the days beginning on Jan. 1 and ending on Dec. 31 of each year.




                                                                                                                 Page 6
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
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Best's Capital Adequacy Relativity (BCAR)
This percentage measures a company's relative capital strength compared to its industry peer
composite. A company's BCAR, which is an important component in determining the appropriateness of
its rating, is calculated by dividing a company's capital adequacy ratio by the capital adequacy ratio of
the median of its industry peer composite using Best's proprietary capital mode. Capital adequacy ratios
are calculated as the net required capital necessary to support components of underwriting, asset, and
credit risks in relation to economic surplus.
organization, and so on.

Blue Chip Stock
The common stock of a company with a long history of profitability and consistent dividend payments.

Bond
A bond is evidence of a debt in which the issuer promises to pay the bondholders a specified amount of
interest and to repay the principal at maturity. Bonds are usually issued in multiples of $1,000.

Book Value
The net value of a company's assets, less its liabilities and the liquidation price of its preferred issues.
The net asset value divided by the number of shares of common stock outstanding equals the book
value per share, which may be higher or lower than the stock's market value.

Broker
Insurance salesperson that searches the marketplace in the interest of clients, not insurance companies.

Broker-Agent
Independent insurance salesperson who represents particular insurers but also might function as a
broker by searching the entire insurance market to place an applicant's coverage to maximize protection
and minimize cost. This person is licensed as an agent and a broker.

Bull Market
When the stock market appears to be advancing overall, it is said to be a bull market.

Business Net Retention
This item represents the percentage of a company's gross writings that are retained for its own account.
Gross writings are the sum of direct writings and assumed writings. This measure excludes affiliated
writings.

Buy-Sell Agreement
A buy-sell agreement is an arrangement between two or more parties that obligates one party to buy
the business and another party to sell the business upon the death, disability, or retirement of one of
the owners.

Bypass trust (Also know as Credit Shelter Trust)

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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
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A trust established to bypass the surviving spouse's estate in order to make full use of each spouse's
$3,500,000 federal estate tax exemption.

Capital
 Equity of shareholders of a stock insurance company. The company's capital and surplus are measured
by the difference between its assets minus its liabilities. This value protects the interests of the
company's policyowners in the event it develops financial problems; the policyowners' benefits are thus
protected by the insurance company's capital. Shareholders' interest is second to that of policyowners.

Capital Gain or Loss
The difference between the sales price and the purchase price of a capital asset. When that difference is
positive, the difference is referred to as a capital gain. When the difference is negative, it is a capital
loss.

Capitalization or Leverage
Measures the exposure of a company's surplus to various operating and financial practices. A highly
leveraged, or poorly capitalized, company can show a high return on surplus, but might be exposed to a
high risk of instability.

Captive Agent
 Representative of a single insurer or fleet of insurers who is obliged to submit business only to that
company, or at the very minimum, give that company first refusal rights on a sale. In exchange, that
insurer usually provides its captive agents with an allowance for office expenses as well as an extensive
list of employee benefits such as pensions, life insurance, health insurance, and credit unions.

Case Management
A system of coordinating medical services to treat a patient, improve care and reduce cost. A case
manager coordinates health care delivery for patients.

Cash Equivalents
Short-term investments, such as U.S. Treasury securities, certificates of deposit, and money market fund
shares, that can be readily converted into cash.

Cash Surrender Value
The amount that an insurance policyholder is entitled to receive when he or she discontinues coverage.
Policyholders are usually able to borrow against the surrender value of a policy from the insurance
company. Policy loans that are not repaid will reduce the policy's death benefit and cash value by the
amount of any outstanding loan balance plus interest.

Casualty
Liability or loss resulting from an accident.

Casualty Insurance
 That type of insurance that is primarily concerned with losses caused by injuries to persons and legal
liability imposed upon the insured for such injury or for damage to property of others. It also includes

                                                                                                                 Page 8
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
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such diverse forms as plate glass, insurance against crime, such as robbery, burglary and forgery, boiler
and machinery insurance and Aviation insurance. Many casualty companies also write surety business.




Ceded Reinsurance Leverage
The ratio of the reinsurance premiums ceded, plus net ceded reinsurance balances from non-US
affiliates for paid losses, unpaid losses, incurred but not reported (IBNR), unearned premiums and
commissions, less funds held from reinsurers, plus ceded reinsurance balances payable, to policyholders'
surplus. This ratio measures the company's dependence upon the security provided by its reinsurers and
its potential exposure to adjustment on such reinsurance.

Change in Net Premiums Written
The annual percentage change in Net Premiums Written. A company should demonstrate its ability to
support controlled business growth with quality surplus growth from strong internal capital generation.

Change in Policyholder Surplus
The percentage change in policyholder surplus from the prior year-end derived from operating
earnings, investment gains, net contributed capital and other miscellaneous sources. This ratio
measures a company's ability to increase policyholders' security.

Charitable trusts
Trusts designed to combine benefits to a charity with a benefit to non-charitable beneficiaries. Pooled
income funds, gift annuities and deferred gift annuities can achieve similar goals.

Charitable Lead Trust
A trust established for the benefit of a charitable organization under which the charitable organization
receives income from an asset for a set number of years or for the trustor's lifetime. Upon the
termination of the trust, the asset reverts to the trustor or to his or her designated heirs. This type of
trust can reduce estate taxes and allows the trustor's heirs to retain control of the assets.

Charitable Remainder Trust
A trust established for the benefit of a charitable organization under which the trustor receives income
from an asset for a set number of years or for the trustor's lifetime. Upon the termination of the trust,
the asset reverts to the charitable organization. The trustor receives a charitable contribution deduction
in the year in which the trust is established, and any gains on assets placed in the trust are exempt from
capital gains tax.

Chartered Financial Consultant (ChFC)
A professional financial planning designation granted by The American College (Bryn Mawr, PA) to
individuals who complete a comprehensive curriculum in financial planning. Prerequisites include
passing a series of written examinations, meeting specified experience requirements and maintaining


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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
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ethical standards. The curriculum encompasses wealth accumulation, risk management, income
taxation, planning for retirement needs, investments, estate and succession planning.

Chartered Life Underwriter (CLU)
A professional designation granted by The American College to individuals who complete a
comprehensive curriculum focused primarily on risk management. Prerequisites include passing a series
of written examinations, meeting specified experience requirements, and maintaining ethical standards.
The curriculum encompasses insurance and financial planning, income taxation, individual life insurance,
life insurance law, estate and succession planning, and planning for business owners and professionals.




                                                                                                               Page 10
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™



Chartered Property and Casualty Underwriter (CPCU)
Professional designation earned after the successful completion of 10 national examinations given by
the American Institute for Property and Liability Underwriters. Covers such areas of expertise as
insurance, risk management, economics, finance, management, accounting, and law. Three years of
work experience also are required in the insurance business or a related area.

Claim
 A demand made by the insured, or the insured's beneficiary, for payment of the benefits as provided by
the policy.

Claimant
A person who submits a claim to an insurance company.

Class 3-6 Bonds (% of PHS)
This test measures exposure to noninvestment grade bonds as a percentage of surplus. Generally,
noninvestment grade bonds carry higher default and illiquidity risks. The designation of quality
classifications that coincide with different bond ratings assigned by major credit rating agencies.

COBRA
The Consolidated Omnibus Budget Reconciliation Act is a federal law requiring employers with more
than 20 employees to offer terminated or retired employees the opportunity to continue their health
insurance coverage for 18 months at the employee's expense. Coverage may be extended to the
employee's dependents for 36 months in the case of divorce or death of the employee.

Coinsurance or Co-Payment
The amount an insured person must pay for a covered medical and/or dental expense if his or her
insurance doesn't provide 100 percent coverage.

Capital
 Equity of shareholders of a stock insurance company. The company's capital and surplus are measured
by the difference between its assets minus its liabilities. This value protects the interests of the
company's policy owners in the event it develops financial problems; the policy owners' benefits are
thus protected by the insurance company's capital. Shareholders' interest is second to that of policy
owners.

Capitalization or Leverage
 Measures the exposure of a company's surplus to various operating and financial practices. A highly
leveraged, or poorly capitalized, company can show a high return on surplus, but might be exposed to a
high risk of instability.

Captive Agent
 Representative of a single insurer or fleet of insurers who is obliged to submit business only to that
company, or at the very minimum, give that company first refusal rights on a sale. In exchange, that

                                                                                                               Page 11
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
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insurer usually provides its captive agents with an allowance for office expenses as well as an extensive
list of employee benefits such as pensions, life insurance, health insurance, and credit unions.

Case Management
A system of coordinating medical services to treat a patient, improve care and reduce cost. A case
manager coordinates health care delivery for patients.

Casualty
Liability or loss resulting from an accident.

Casualty Insurance
That type of insurance that is primarily concerned with losses caused by injuries to persons and legal
liability imposed upon the insured for such injury or for damage to property of others. It also includes
such diverse forms as plate glass, insurance against crime, such as robbery, burglary and forgery, boiler
and machinery insurance and Aviation insurance. Many casualty companies also write surety business.

Ceded Reinsurance Leverage
The ratio of the reinsurance premiums ceded, plus net ceded reinsurance balances from non-US
affiliates for paid losses, unpaid losses, incurred but not reported (IBNR), unearned premiums and
commissions, less funds held from reinsurers, plus ceded reinsurance balances payable, to policyholders'
surplus. This ratio measures the company's dependence upon the security provided by its reinsurers and
its potential exposure to adjustment on such reinsurance.

Change in Net Premiums Written
The annual percentage change in Net Premiums Written. A company should demonstrate its ability to
support controlled business growth with quality surplus growth from strong internal capital generation.

Change in Policyholder Surplus
The percentage change in policyholder surplus from the prior year-end derived from operating earnings,
investment gains, net contributed capital and other miscellaneous sources. This ratio measures a
company's ability to increase policyholders' security.

Chartered Property and Casualty Underwriter (CPCU)
Professional designation earned after the successful completion of 10 national examinations given by
the American Institute for Property and Liability Underwriters. Covers such areas of expertise as
insurance, risk management, economics, finance, management, accounting, and law. Three years of
work experience also are required in the insurance business or a related area.


Claim
A demand made by the insured, or the insured's beneficiary, for payment of the benefits as provided by
the policy.

Class 3-6 Bonds (% of PHS)


                                                                                                               Page 12
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
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This test measures exposure to noninvestment grade bonds as a percentage of surplus. Generally,
noninvestment grade bonds carry higher default and illiquidity risks. The designation of quality
classifications that coincide with different bond ratings assigned by major credit rating agencies.




                                                                                                               Page 13
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
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Coinsurance
In property insurance, requires the policyholder to carry insurance equal to a specified percentage of
the value of property to receive full payment on a loss. For health insurance, it is a percentage of each
claim above the deductible paid by the policyholder. For a 20% health insurance coinsurance clause, the
policyholder pays for the deductible plus 20% of his covered losses. After paying 80% of losses up to a
specified ceiling, the insurer starts paying 100% of losses.

Collision Insurance
Covers physical damage to the insured's automobile (other than that covered under comprehensive
insurance) resulting from contact with another inanimate object.

Combined Ratio after Policyholder Dividends
The sum of the loss, expense and policyholder dividend ratios not reflecting investment income or
income taxes. This ratio measures the company's overall underwriting profitability, and a combined ratio
of less than 100 indicates an underwriting profit.

Commercial Lines
Refers to insurance for businesses, professionals and commercial establishments.

Commission
Fee paid to an agent or insurance salesperson as a percentage of the policy premium. The percentage
varies widely depending on coverage, the insurer and the marketing methods.

Commodities
The generic term for goods such as grains, foodstuffs, livestock, oils, and metals which are traded on
national exchanges. These exchanges deal in both "spot" trading (for current delivery) and "futures"
trading (for delivery in future months).

Common Carrier
A business or agency that is available to the public for transportation of persons, goods or messages.
Common carriers include trucking companies, bus lines and airlines.




                                                                                                               Page 14
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
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Common Law Marriage
Common-law marriage, sometimes called de facto marriage, informal marriage or marriage by habit and
repute, is a form of interpersonal status which is legally recognized in some jurisdictions as a marriage
even though no legally recognized marriage ceremony is performed or civil marriage contract is entered
into or the marriage registered in a civil registry. A common-law marriage is legally binding in some
common law jurisdictions but has no legal consequence in others. In some jurisdictions without true
common-law marriages (e.g., Hungary), the term "common-law marriage" is used as a synonym for non-
marital relationships such as domestic partnership or reciprocal beneficiaries relationship.

Only a few states recognize common law marriages:
Alabama
Colorado
Georgia (if created before 1/1/97)
Idaho (if created before 1/1/96)
Iowa
Kansas
Montana
New Hampshire (for inheritance purposes only)
Ohio (if created before 10/10/91)
Oklahoma (possibly only if created before 11/1/98. Oklahoma's laws and court decisions may be in
conflict about whether common law marriages formed in that state after 11/1/98 will be recognized.)
Pennsylvania (if created before 1/1/05)
Rhode Island
South Carolina
Texas
Utah
Washington, D.C.

Common Stock
A unit of ownership in a corporation. Common stockholders participate in the corporation's profits or
losses by receiving dividends and by capital gains or losses in the stock's share price.

Community Property
Method by which a married couple owns property in some states whereby each spouse owns a one-half
interest. Upon the death of one spouse, the survivor's half remains with the survivor, and the deceased's
half becomes part of their probate estate.

Compound Interest
Interest that is computed on the principal and on the accrued interest. Compound interest may be
computed continuously, daily, monthly, quarterly, semiannually, or annually.




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Comprehensive Insurance
 Auto insurance coverage providing protection in the event of physical damage (other than collision) or
theft of the insured car. For example, fire damage or a cracked windshield would be covered under the
comprehensive section.

Concurrent Periods
In hospital income protection, when a patient is confined to a hospital due to more than one injury
and/or illness at the same time, benefits are paid as if the total disability resulted from only one cause.

Conditional Reserves
This item represents the aggregate of various reserves which, for technical reasons, are treated by
companies as liabilities. Such reserves, which are similar to free resources or surplus, include
unauthorized reinsurance, excess of statutory loss reserves over statement reserves, dividends to
policyholders undeclared and other similar reserves established voluntarily or in compliance with
statutory regulations.

Consumer Price Index
The U.S. Department of Labor's main indicator of inflation. The Consumer Price Index is calculated each
month from the cost of some 400 retail items in urban areas throughout the United States.
Convertible -Term life insurance coverage that can be converted into permanent insurance regardless of
an insured's physical condition and without a medical examination. The individual cannot be denied
coverage or charged an additional premium for any health problems.

Copayment
A predetermined, flat fee an individual pays for health-care services, in addition to what insurance
covers. For example, some HMOs require a $10 copayment for each office visit, regardless of the type or
level of services provided during the visit. Copayments are not usually specified by percentages.

Cost Basis
A contract owner’s initial investment in an annuity of after tax money, plus any additional funds
invested in the same annuity at a later date. This applies to non-qualified annuities only.

Cost-of-Living Adjustment (COLA)
Automatic adjustment applied to Social Security retirement payments when the consumer price index
increases at a rate of at least 3%, the first quarter of one year to the first quarter of the next year.

Coverage
The scope of protection provided under an insurance policy. In property insurance, coverage lists perils
insured against, properties covered, locations covered, individuals insured, and the limits of
indemnification. In life insurance, living and death benefits are listed.

Coverage Area
The geographic region covered by travel insurance.

                                                                                                               Page 16
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through Sigma Planning Corporation, a registered investment advisor.
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Trusted financial guidance for your lifestyle ™




                                                                                                               Page 17
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Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
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Credit Shelter Trust
Have sizable assets and looking to shelter the maximum you can from your estate taxes? Then explore a
credit shelter trust. Remember, if your estate exceeds a certain size, your surviving spouse's estate may
be subject to estate taxes on that excess upon his or her death. So a credit shelter trust is typically used
to pass an amount equal to the estate tax exemption into a trust when the first spouse dies. The credit
shelter trust then can provide income to the surviving spouse or children. And upon the second spouse's
death, it can pass assets on to the beneficiary free from estate taxes. This type of trust is designed to
ensure that a married couple receives the benefit of both estate tax exemptions to which they are
entitled.

Creditable Coverage
Term means that benefits provided by other drug plans are at least as good as those provided by the
new Medicare Part D program. This may be important to people eligible for Medicare Part D but who do
not sign up at their first opportunity because if the other plans provide creditable coverage, plan
members can later convert to Medicare Part D without paying higher premiums than those in effect
during their open enrollment period.

Cross Ownership of Life Insurance
Cross-ownership of life insurance policies between spouses or business partners is a strategy for
preserving flexibility and for excluding one but not both policies from estate taxation.

Current Liquidity
The sum of cash, unaffiliated invested assets and encumbrances on other properties to net liabilities
plus ceded reinsurance balances payable, expressed as a percent. This ratio measures the proportion of
liabilities covered by unencumbered cash and unaffiliated investments. If this ratio is less than 100, the
company's solvency is dependent on the collectibility or marketability of premium balances and
investments in affiliates. This ratio assumes the collectibility of all amounts recoverable from reinsurers
on paid and unpaid losses and unearned premiums.

Death Benefit
A death benefit may be a percentage of the annuitant's pension. For example, a beneficiary might be
entitled to 65% of the annuitant's monthly pension. Alternatively, the benefit may be a large lump-sum
payment from a life insurance policy. The size and structure of the payment is determined by the type of
policy the annuitant held at the time of death.

Deductible
Amount of loss that the insured pays before the insurance kicks in.

Deduction
An amount that can be subtracted from gross income, from a gross estate, or from a gift, thereby
lowering the amount on which tax is assessed.

Deed

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A legal document that conveys title to a property.




Defined Benefit Plan
A qualified retirement plan under which a retiring employee will receive a guaranteed retirement fund,
usually payable in installments. Annual contributions may be made to the plan by the employer at the
level needed to fund the benefit. The annual contributions are limited to a specified amount, indexed to
inflation.

Defined Contribution Plan
A retirement plan under which the annual contributions made by the employer or employee are
generally stated as a fixed percentage of the employee's compensation or company profits. The amount
of retirement benefits is not guaranteed; rather, it depends upon the investment performance of the
employee's account.

Developed to Net Premiums Earned
The ratio of developed premiums through the year to net premiums earned. If premium growth was
relatively steady, and the mix of business by line didn't materially change, this ratio measures whether
or not a company's loss reserves are keeping pace with premium growth.

Development to Policyholder Surplus
 The ratio measures reserve deficiency or redundancy in relation to policyholder surplus. This ratio
reflects the degree to which year-end surplus was either overstated (+) or understated (-) in each of the
past several years, if original reserves had been restated to reflect subsequent development through
year end.

Direct Premiums Written
The aggregate amount of recorded originated premiums, other than reinsurance, written during the
year, whether collected or not, at the close of the year, plus retrospective audit premium collections,
after deducting all return premiums.
Direct Writer - An insurer whose distribution mechanism is either the direct selling system or the
exclusive agency system.

Disability Insurance
Insurance policy that pays benefits the event that the policyholder becomes incapable of working.

Disease Management
A system of coordinated health-care interventions and communications for patients with certain
illnesses.

Diversification
Investing in different companies, industries, or asset classes in an attempt to limit overall risk. Of course,
diversification cannot eliminate or guarantee against the risk of investment losses; it is a method used to

                                                                                                               Page 19
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
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through Sigma Planning Corporation, a registered investment advisor.
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help manage investment risk. Diversification may also mean the participation of a large corporation in a
wide range of business activities.




Dividend
A pro rata portion of earnings usually distributed in cash by a corporation to its stockholders. In
preferred stock, dividends are usually fixed; with common shares, dividends may vary with the fortunes
of the company.

Dollar Cost Averaging
A system of investing in which the investor buys a fixed dollar amount of securities at regular intervals.
The investor thus buys more shares when the price is low and fewer shares when the price rises, and the
average cost per share is lower than the average price per share. Dollar cost averaging does not ensure a
profit or prevent a loss. Such plans involve continuous investments in securities regardless of fluctuating
prices. You should consider your financial ability to continue making purchases during periods of low
and high price levels. However, this can be an effective way for investors to accumulate shares to help
meet long-term goals.

Domestic Partner Agreement (also called Living Together or Property Sharing Agreement)
A domestic partnership agreement is a document that explains the contractual legal rights and
responsibilities of each partner when a couple decides to form a long-term committed relationship. For
example, in your domestic partnership agreement, you and your partner can determine:

    Whether a particular piece of real or personal property is owned jointly or belongs solely to one
    partner and how one or both parties took title to that property;
    Whether a gift or inheritance made to one partner is held jointly or individually
    Who is responsible for household duties and chores;
    How to share your income.
In the event of potential disputes or misunderstandings, a domestic partnership agreement can help
clarify ownership of property, provide guidance for dividing property in the event of a separation and
specify a dispute resolution mechanism such as arbitration. Because some states do not recognize the
validity of domestic partnership agreements, it is recommended that you consult an attorney in your
area.

Domestic Partner Benefits
Employers compensate employees through more than just wages and salary by providing benefits such
as health insurance and dental care. The traditional benefits structure includes an employee’s opposite-
sex spouse and children. An ever-growing number of employers, including the majority of Fortune 500


                                                                                                               Page 20
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
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companies, further extend these benefits to lesbian, gay, bisexual and transgender employees and their
families by including an employee's same-sex partner and the partner's children.




                                                                                                               Page 21
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
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Domestic Partner Registration
Government entities increasingly give legal recognition to people who are unmarried but living together
by allowing couples to register with government agencies as a "domestic partnership." This allows you
the formal recognition akin to a marriage certificate. In some places, simply registering allows same sex
couples to visit each other in jail or hospital facilities and buy real estate jointly. If you're registering a
domestic partnership with a governmental entity such as a city, town or state, the registration may
become public record. Some governments also extend the same health care benefits to registered
domestic partners that would be extended to the spouse of a government employee.

Donor
Person who makes a gift; the recipient is known as the donee.

Donor-advised fund
A charitable giving program of an Internal Revenue Code Section 501(c)(3) public charity in which you
can take a federal income tax deduction for your irrevocable contributions in the year you make your
donation to the charity, while you have the privilege to recommend grants to U.S. public charities of
your choice.

Durable Power of Attorney
A legal document that enables an individual to designate another person, called the attorney-in-fact, to
act on his/her behalf, even in the event the individual becomes disabled or incapacitated.

Durable Power of Attorney for Finances
A durable power of attorney for finances -- or financial power of attorney -- is a simple, inexpensive, and
reliable way to arrange for someone to manage your finances if you become incapacitated (unable to
make decisions for yourself).

Durable Power of Attorney for Health or Advance Health Care Directive
In this document, you appoint someone you trust to be your health care agent (sometimes called an
attorney-in-fact for health care, health care proxy, or surrogate) to make any necessary health care
decisions for you and to see that doctors and other health care providers give you the type of care you
wish to receive.

Earned Premium
The amount of the premium that as been paid for in advance that has been "earned" by virtue of the
fact that time has passed without claim. A three-year policy that has been paid in advance and is one
year old would have only partly earned the premium

Efficient Frontier
A statistical result from the analysis of the risk and return for a given set of assets that indicates the
balance of assets that may, under certain assumptions, achieve the best return for a given level of risk.
Elimination Period- The time which must pass after filing a claim before policyholder can collect
insurance benefits. Also known as "waiting period."


                                                                                                               Page 22
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
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through Sigma Planning Corporation, a registered investment advisor.
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Trusted financial guidance for your lifestyle ™




                                                                                                               Page 23
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
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Employer-Sponsored Retirement Plan
A tax-favored retirement plan that is sponsored by an employer. Among the more common employer-
sponsored retirement plans are 401(k) plans, 403(b) plans, simplified employee pension plans, and
profit-sharing plans.

Employers Liability Insurance
Coverage against common law liability of an employer for accidents to employees, as distinguished from
liability imposed by a workers' compensation law.

Encumbrance
A claim on property, such as a mortgage, a lien for work and materials, or a right of dower. The interest
of the property owner is reduced by the amount of the encumbrance.

Equity
The value of a person's ownership in real property or securities; the market value of a property or
business, less all claims and liens against it. Partial ownership of a company by holding shares of its
stock. For this reason, equity is used as a synonym for stock as a type of investment.

ERISA
The Employee Retirement Income Security Act is a federal law covering all aspects of employee
retirement plans. If employers provide plans, they must be adequately funded and provide for vesting,
survivor's rights, and disclosures.

ESOP (employee stock ownership plan)
A defined contribution retirement plan in which company contributions must be invested primarily in
qualifying employer securities.

Estate
An estate is the net worth of a person at any point in time. It is the sum of a person's assets - legal rights,
interests and entitlements to property of any kind - less all liabilities at that time. The issue is of special
legal significance on a question of bankruptcy and death of the person. Depending on the context, the
term is also used in reference to an estate in land or of a particular kind of property (such as real estate
or personal estate). The term is also used to refer to the sum of a person's assets only.

Estate planning
The process of anticipating and arranging for the disposal of an estate. Estate planning typically
attempts to eliminate uncertainties over the administration of a probate and maximize the value of the
estate by reducing taxes and other expenses. Guardians are often designated for minor children and
beneficiaries in incapacity.

Estate Conservation
Activities coordinated to provide for the orderly and cost-effective distribution of an individual's assets
at the time of his or her death. Estate conservation often includes the use of wills and trusts.

Estate Tax

                                                                                                               Page 24
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
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through Sigma Planning Corporation, a registered investment advisor.
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Upon the death of a decedent, federal and state governments impose taxes on the value of the estate
left to others (with limitations).

Estate tax credit (or estate tax credit equivalent)
Federal estate tax credit that is equal to the tax on the first $3,500,000 of the estate in 2009. This credit
is applied towards estate taxes upon your death.

Exclusions
Items or conditions that are not covered by the general insurance contract.

Executive Bonus Plan
The employer pays for a benefit that is owned by the executive. The bonus could take the form of cash,
automobiles, life insurance, or other items of value to the executive.

Executor
A person named by the probate courts or the will to carry out the directions and requests of the
decedent.

Expense Ratio
The ratio of underwriting expenses (including commissions) to net premiums written. This ratio
measures the company's operational efficiency in underwriting its book of business.

Exposure
Measure of vulnerability to loss, usually expressed in dollars or units.

Extended Replacement Cost
This option extends replacement cost loss settlement to personal property and to outdoor antennas,
carpeting, domestic appliances, cloth awnings, and outdoor equipment, subject to limitations on certain
kinds of personal property; includes inflation protection coverage.

Fair market value (FMV)
An estimate of the market value of a property, based on what a knowledgeable, willing, and
unpressured buyer would probably pay to a knowledgeable, willing, and unpressured seller in the real
estate market. An estimate of fair market value may be founded either on precedent or extrapolation.
Fair market value differs from the intrinsic value that an individual may place on the same asset based
on their own preferences and circumstances.

Family limited partnership
A partnership arrangement designed for the transfer of business, property or other assets from parents
to children to minimize estate tax liability and provide protection from creditors.

Federal Deposit Insurance Corporation (FDIC)
In the United States, a federal agency that insures deposits made into member banks and savings and
loans up to $100,000 per person/per institution. Annuities are not subject to FDIC insurance.


                                                                                                               Page 25
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
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Trusted financial guidance for your lifestyle ™
Federal estate exclusion amount
The amount an individual can exclude from his/her estate for federal estate tax purposes. It is $3.5
million in 2009.




                                                                                                               Page 26
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™
File-and-Use Rating Laws
State-based laws which permit insurers to adopt new rates without the prior approval of the insurance
department. Usually insurers submit their new rates with supporting statistical data.

Financing Entity
Provides money for purchases.

Fixed Annuity
An annuity for which the insurer assumes the contract’s investment risk and guarantees to pay a
specified rate of interest on the accumulated value for a specified period of time. Premiums paid for a
fixed annuity are paid into an insurer’s general account.

Fixed Income
Income from investments, such as CDs, Social Security benefits, pension benefits, some annuities, or
most bonds, that is the same every month.

Floater
A separate policy available to cover the value of goods beyond the coverage of a standard renters
insurance policy including movable property such as jewelry or sports equipment.

Footnote
If "Net to beneficiaries" is less than 0, this result may be caused by liabilities that exceed assets. For
married couples, this result could be caused by entering individual liabilities while naming the spouse as
the beneficiary of individually owned assets. As a practical matter, liabilities will be offset from assets in
calculating your estate tax and will be settled from available estate assets. Consult with your
professional with regard to your particular situation. You can rerun this illustration with different inputs
to test alternative scenarios.

Free-look Period
The period after the owner receives the annuity contract in which the contract can be cancelled and
treated as void from the contract date.

Fundamental Analysis
An approach to the stock market in which specific factors - such as the price-to-earnings ratio, yield, or
return on equity - are used to determine what stock may be favorable for investment.

Future Purchase Option
Life and health insurance provisions that guarantee the insured the right to buy additional coverage
without proving insurability. Also known as "guaranteed insurability option."

General Account
All premiums are paid into an insurer's general account. Thus, buyers are subject to credit-risk exposure
to the insurance company, which is low but not zero.

General Liability Insurance

                                                                                                               Page 27
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through Sigma Planning Corporation, a registered investment advisor.
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Insurance designed to protect business owners and operators from a wide variety of liability exposures.
Exposures could include liability arising from accidents resulting from the insured's premises or
operations, products sold by the insured, operations completed by the insured, and contractual liability.

General Power of Attorney
Authorizes your Agent to act on your behalf in a variety of different situations.

Generation-Skipping Trust
By using your generation-skipping tax exemption, this trust can permit trust assets to be distributed to
your grandchildren without incurring either a generation-skipping tax or estate taxes on the subsequent
death of your children.

Gift Annuity
Designed to exchange a charitable gift for a fixed, lifetime annuity to its donor, beginning immediately or
at some future date (deferred gift annuity).

Gift Taxes
A federal tax levied on the transfer of property as a gift. This tax is paid by the donor. In 2009, the first
$13,000 a year from a donor to each recipient is exempt from tax. Most states also impose a gift tax. The
gift tax exemption is indexed for inflation.
Gifts to spouses who are U.S. citizen are exempt from gift taxes due to the unlimited marital deduction.
In 2009 and 2010 gifts to spouses who aren't U.S. citizens are exempt up to the first $133,000, which is
an increase from $128,000 in 2008.

The current federal lifetime gifting exemption is $1,000,000 and although the federal estate tax is
scheduled to disappear in 2010, the gift tax will remain with a $1,000,000 lifetime exemption for 2010.
Two states also assess gift taxes, Connecticut and Tennessee. Louisiana's gift tax was abolished on July 1,
2008, and North Carolina's gift tax was abolished on January 1, 2009.

Gifting Allowance (Also known as annual gift tax exclusion)
Currently $13,000/year-the amount you can give away each year to as many individuals as you choose
without incurring federal gift tax or depleting your unified credit equivalent.

GLBT (Gay, Lesbian, Bisexual, Transgender)
LGBT (or GLBT) is an initialism referring collectively to lesbian, gay, bisexual, and transgender people.

Grace Period
The length of time (usually 31 days) after a premium is due and unpaid during which the policy,
including all riders, remains in force. If a premium is paid during the grace period, the premium is
considered to have been paid on time. In Universal Life policies, it typically provides for coverage to
remain in force for 60 days following the date cash value becomes insufficient to support the payment
of monthly insurance costs.

Grantor Retained Annuity Trust


                                                                                                               Page 28
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Trusts designed for the transfer of business or property assets to shift future appreciation to children
through use of gift tax rather than estate tax.

Gross Leverage
The sum of net leverage and ceded reinsurance leverage. This ratio measures a company's gross
exposure to pricing errors in its current book of business, to errors of estimating its liabilities, and
exposure to its reinsurers.

Guaranteed Insurability Option –
See "future purchase option."

Guarantee Period
A period of time during which the company will credit a stated rate of interest. The guarantee is usually
one year unless stated otherwise.

Guaranteed Death Benefit
A benefit term that guarantees that the beneficiary, as named in the contract, will receive a death
benefit if the annuitant dies before the annuity begins paying benefits. The benefit
received differs among companies and contracts, but the beneficiary is guaranteed an amount equal to
what was invested or the value of the contract on the most recent policy anniversary statement,
whichever is higher.

Guaranteed Issue Right
The right to purchase insurance without physical examination; the present and past physical condition
of the applicant are not considered.

Guaranteed Interest Rate
The percentage return that is stated by the company to be paid on funds in an annuity.

Guaranteed Renewable
A policy provision in many products which guarantees the policy owner the right to renew coverage at
every policy anniversary date. The company does not have the right to cancel coverage except for
nonpayment of premiums by the policy owner; however, the company can raise rates if they choose.

Guaranty Association
An organization of life insurance companies within a state responsible for covering the financial
obligations of a member company that becomes insolvent.

Guardian – Law
A person who is entrusted by law with the care of the person or property, or both, of another, as a
minor or someone legally incapable of managing his or her own affairs.

Hazard
A circumstance that increases the likelihood or probable severity of a loss. For example, the storing of
explosives in a home basement is a hazard that increases the probability of an explosion.

                                                                                                               Page 29
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Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
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Hazardous Activity
Bungee jumping, scuba diving, horse riding and other activities not generally covered by standard
insurance policies. For insurers that do provide cover for such activities, it is unlikely they will cover
liability and personal accident, which should be provided by the company hosting the activity.

Health Care Power of Attorney
Allows you to appoint someone to make health care decisions for you if you're incapacitated.




                                                                                                               Page 30
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
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Trusted financial guidance for your lifestyle ™
Health Care Proxy (or durable power of attorney for health care)
A type of power of attorney that limits a designated individual's decision-making power to your medical
affairs.

Health Maintenance Organization (HMO)
Prepaid group health insurance plan that entitles members to services of participating physicians,
hospitals and clinics. Emphasis is on preventative medicine, and members must use contracted health-
care providers.

Health Reimbursement Arrangement
Owners of high-deductible health plans who are not qualified for a health savings account can use an
HRA.

Health Savings Account
Plan that allows you to contribute pre-tax money to be used for qualified medical expenses. HSAs, which
are portable, must be linked to a high-deductible health insurance policy.

Holographic Will
A will entirely in the handwriting of the testator. Without witnesses, holographic wills are valid and
enforceable only in some states.

Hurricane Deductible
Amount you must pay out-of-pocket before hurricane insurance will kick in. Many insurers in hurricane-
prone states are selling homeowners insurance policies with percentage deductibles for storm damage,
instead of the traditional dollar deductibles used for claims such as fire and theft. Percentage
deductibles vary from one percent of a home's insured value to 15 percent, depending on many factors
that differ by state and insurer.

Immediate Annuity
An annuity under which periodic income benefit payments are scheduled to begin one annuity period
after the contract’s issue date.

Impaired Insurer
An insurer which is in financial difficulty to the point where its ability to meet financial obligations or
regulatory requirements is in question.

Indemnity
Restoration to the victim of a loss by payment, repair or replacement.

Independent Insurance Agents & Brokers of America (IIABA)
Formerly the Independent Insurance Agents of America (IIAA), this is a member organization of
independent agents and brokers monitoring and affecting industry issues. Numerous state associations
are affiliated with the IIABA.

Income Taxes

                                                                                                               Page 31
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Incurred income taxes (including income taxes on capital gains) reported in each annual statement for
that year.

Index Annuity
A Fixed Annuity that offers the potential of market-linked growth with the safety of a minimum interest
rate guarantee over the term of the contract.

Index Cap Rate
The Index Cap Rate is the maximum annual percentage increase in the Index Value that can be credited
to the annuity.

Index Margin
Amount deducted from the index gain.

Individual Retirement Account (IRA)
Contributions to a traditional IRA are deductible from earned income in the calculation of federal and
state income taxes if the taxpayer meets certain requirements. The earnings accumulate tax deferred
until withdrawn, and then the entire withdrawal is taxed as ordinary income. Individuals not eligible to
make deductible contributions may make nondeductible contributions, the earnings on which would be
tax deferred.

Inflation
An increase in the price of products and services over time. The government's main measure of inflation
is the Consumer Price Index.

Inflation Protection
An optional property coverage endorsement offered by some insurers that increases the policy's limits
of insurance during the policy term to keep pace with inflation.

Inheritance
That which is inherited; a title or property or estate that passes by law to the heir on the death of the
owner.

Inherited IRA
An IRA that becomes the property of someone other than the spouse of the deceased owner of the IRA.

Insurable Interest
Interest in property such that loss or destruction of the property could cause a financial loss.

Insurance Adjuster
A representative of the insurer who seeks to determine the extent of the insurer's liability for loss when
a claim is submitted. Independent insurance adjusters are hired by insurance companies on an "as
needed" basis and might work for several insurance companies at the same time. Independent adjusters
charge insurance companies both by the hour and by miles traveled. Public adjusters work for the
insured in the settlement of claims and receive a percentage of the claim as their fee. A.M. Best's
Directory of Recommended Insurance Attorneys and Adjusters lists independent adjusters only.
                                                                                                               Page 32
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                                                                                                               Page 33
Lisa M. Winward - lwinward@sammonsrep.com - affinitywealthsolutions.net
1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™
Insurance Attorneys
An attorney who practices the law as it relates to insurance matters. Attorneys might be solo
practitioners or work as part of a law firm. Insurance companies who retain attorneys to defend them
against law suits might hire staff attorneys to work for them in-house or they might retain attorneys on
an as-needed basis. A.M. Best's Directory of Recommended Attorneys and Adjusters lists insurance
defense attorneys who concentrate their practice in insurance defense such as coverage issues, bad
faith, malpractice, products liability, and workers' compensation.

Insurance Institute of America (IIA)
An organization which develops programs and conducts national examinations in general insurance, risk
management, management, adjusting, underwriting, auditing and loss control management.

Interest-Crediting Methods
There are at least 35 interest-crediting methods that insurers use. They usually involve some
combination of point-to-point, annual reset, yield spread, averaging, or high water mark.

Intestate
A person who dies without leaving a valid will. State law then determines who inherits the property or
serves as guardian for any minor children.

Investment Category
A broad class of assets with similar characteristics. The five investment categories include cash
Investment Income - The return received by insurers from their investment portfolios including interest,
dividends and realized capital gains on stocks. It doesn't include the value of any stocks or bonds that
the company currently owns.

Investments in Affiliates
 Bonds, stocks, collateral loans, short-term investments in affiliated and real estate properties occupied
by the company.

Insurance Regulatory Information System
 Introduced by the National Association of Insurance Commissioners in 1974 to identify insurance
companies that might require further regulatory review.

Irrevocable Life Insurance Trust (ILIT)
An Irrevocable Life Insurance Trust ("ILIT") offers the opportunity of escaping taxes not just in one
estate, but in several estates. The ILIT is typically a trust for the benefit of the spouse and/or children.
An life insurance policy that is placed in an ILIT is considered to have no owner. Thus, once placed in an
ILIT, you do not have the power to change or cancel the life insurance policy.

Irrevocable Trust
Don't mind giving up control now so that your family can pay less in estate taxes later? Then consider an
"irrevocable" trust that transfers your assets out of your estate - and potentially out of the reach of
estate taxes. An irrevocable trust cannot be altered after it has been executed. One specific type of


                                                                                                               Page 34
Lisa M. Winward - lwinward@sammonsrep.com - affinitywealthsolutions.net
1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™
irrevocable trust is called a "trust under will." This simply means that your retirement plan assets will be
transferred to a trust that is specified in your will.

Joint Account
Brokerage of banking account that is owned together (jointly) by two or more individuals.

Joint Annuitant
A person who is one of two or more people who will receive annuity benefits .

Joint and Survivor Annuity
Most pension plans must offer this form of pension plan payout that pays over the life of the retiree and
his or her spouse after the retiree dies. The retiree and his or her spouse must specifically choose not to
accept this payment form.

Joint Owner
The person or other entity that enters into a joint contract of insurance with an insurer and actually
jointly owns the insurance policy with another person or entity.

Joint Tenancy
Co-ownership of property by two or more people in which the survivor(s) automatically assumes
ownership of a decedent's interest.

Joint Tenants with Right of Survivorship (JTWROS)
When two or more individuals jointly own assets, the interest of a deceased individual owner
automatically passes to the survivor(s) upon his/her death.

Jointly Held Property
Property owned by two or more persons under joint tenancy, tenancy in common, or, in some states,
community property.

Keogh Plan
This retirement plan, named for Eugene Keogh, is designed for self-employed individuals. The
contribution amount is indexed annually for inflation.

Laddering
Purchasing bond investments that mature at different time intervals.

Lapse Ratio
The ratio of the number of life insurance policies that lapsed within a given period to the number in
force at the beginning of that period.

Least Expensive Alternative Treatment
The amount an insurance company will pay based on its determination of cost for a particular
procedure.


                                                                                                               Page 35
Lisa M. Winward - lwinward@sammonsrep.com - affinitywealthsolutions.net
1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™
Leverage or Capitalization
Measures the exposure of a company's surplus to various operating and financial practices. A highly
leveraged, or poorly capitalized, company can show a high return on surplus, but might be exposed to a
high risk of instability.




                                                                                                               Page 36
Lisa M. Winward - lwinward@sammonsrep.com - affinitywealthsolutions.net
1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™
Liability
Any claim against the assets of a person or corporation: accounts payable, wages, and salaries payable,
dividends declared payable, accrued taxes payable, and fixed or long-term obligations such as
mortgages, debentures, and bank loans.

Liability Insurance
Insurance that pays and renders service on behalf of an insured for loss arising out of his responsibility,
due to negligence, to others imposed by law or assumed by contract.

Licensed
Indicates the company is incorporated (or chartered) in another state but is a licensed (admitted)
insurer for this state to write specific lines of business for which it qualifies.

Licensed for Reinsurance Only
Indicates the company is a licensed (admitted) insurer to write reinsurance on risks in this state.

Life Expectancy Mean
1. The age until which a person is expected to live.
2. The remaining number of years an individual is expected to live, based on IRS issued life expectancy
tables. The life expectancy, for required minimum distribution (RMD) calculation purposes, is
determined by the current age of the individual.


Life insurance trust
An irrevocable trust that is designed to avoid estate tax and provide liquidity to the beneficiaries.

Lifetime Reserve Days
Sixty additional days Medicare pays for when you are hospitalized for more than 90 days in a benefit
period. These days can only be used once during your lifetime. For each lifetime reserve day, Medicare
pays all covered costs except for a daily coinsurance amount.

Limited Partnership
Limited partnerships pool the money of investors to develop or purchase income-producing properties.
When the partnership subsequently receives income from these properties, it passes the income on to
its investors as dividend payments.

Liquidity
Liquidity is the ability of an individual or business to quickly convert assets into cash without incurring a
considerable loss. There are two kinds of liquidity: quick and current. Quick liquidity refers to funds--
cash, short-term investments, and government bonds--and possessions which can immediately be
converted into cash in the case of an emergency. Current liquidity refers to current liquidity plus
possessions such as real estate which cannot be immediately liquidated, but eventually can be sold and
converted into cash. Quick liquidity is a subset of current liquidity. This reflects the financial stability of a
company and thus their rating.


                                                                                                               Page 37
Lisa M. Winward - lwinward@sammonsrep.com - affinitywealthsolutions.net
1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™




                                                                                                               Page 38
Lisa M. Winward - lwinward@sammonsrep.com - affinitywealthsolutions.net
1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™
Living Benefits
This feature allows you, under certain circumstances, to receive the proceeds of your life insurance
policy before you die. Such circumstances include terminal or catastrophic illness, the need for long-
term care, or confinement to a nursing home. Also known as "accelerated death benefits."

Living Trust (Also called revocable trust)
A trust that gives you the ability to pass trust assets to your beneficiaries without the delay or expense
of probate.

Living wills
One part of advance directives and describe your treatment preferences in end-of-life situations.
Unexpected end-of-life situations can happen at any age, so all adults need advance directives.

Lloyd's
Generally refers to Lloyd's of London, England, an institution within which individual underwriters
accept or reject the risks offered to them. The Lloyd's Corp. provides the support facility for their
activities.

Lloyds Organizations
These organizations are voluntary unincorporated associations of individuals. Each individual assumes a
specified portion of the liability under each policy issued. The underwriters operate through a common
attorney-in-fact appointed for this purpose by the underwriters. The laws of most states contain some
provisions governing the formation and operation of such organizations, but these laws don't generally
provide as strict a supervision and control as the laws dealing with incorporated stock and mutual
insurance companies.

Long-term care (LTC)
A variety of services which help meet both the medical and non-medical need of people with a chronic
illness or disability who cannot care for themselves for long periods of time.
It is common for long-term care to provide custodial and non-skilled care, such as assisting with normal
daily tasks like dressing, bathing, and using the bathroom. Increasingly, long term care involves
providing a level of medical care that requires the expertise of skilled practitioners to address the often
multiple chronic conditions associated with older populations. Long-term care can be provided at home,
in the community, in assisted living or in nursing homes. Long-term care may be needed by people of
any age, even though it is a common need for senior citizens.

Loss Adjustment Expenses
Expenses incurred to investigate and settle losses.

Loss and Loss
Adjustment Reserves to Policyholder Surplus Ratio - The higher the multiple of loss reserves to surplus,
the more a company's solvency is dependent upon having and maintaining reserve adequacy.

Losses and Loss-Adjustment Expenses


                                                                                                               Page 39
Lisa M. Winward - lwinward@sammonsrep.com - affinitywealthsolutions.net
1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™
This represents the total reserves for unpaid losses and loss-adjustment expenses, including reserves for
any incurred but not reported losses, and supplemental reserves established by the company. It is the
total for all lines of business and all accident years.

Loss Control
All methods taken to reduce the frequency and/or severity of losses including exposure avoidance, loss
prevention, loss reduction, segregation of exposure units and noninsurance transfer of risk. A
combination of risk control techniques with risk financing techniques forms the nucleus of a risk
management program. The use of appropriate insurance, avoidance of risk, loss control, risk retention,
self insuring, and other techniques that minimize the risks of a business, individual, or organization.

Loss Ratio
The ratio of incurred losses and loss-adjustment expenses to net premiums earned. This ratio measures
the company's underlying profitability, or loss experience, on its total book of business.

Loss Reserve
The estimated liability, as it would appear in an insurer's financial statement, for unpaid insurance
claims or losses that have occurred as of a given evaluation date. Usually includes losses incurred but
not reported (IBNR), losses due but not yet paid, and amounts not yet due. For individual claims, the loss
reserve is the estimate of what will ultimately be paid out on that claim.

Losses Incurred (Pure Losses)
Net paid losses during the current year plus the change in loss reserves since the prior year end.

Lump-Sum Distribution
The disbursement of the entire value of an employer-sponsored retirement plan, pension plan, annuity,
or similar account to the account owner or beneficiary. Lump-sum distributions may be rolled over into
another tax-deferred account.

Marginal Tax Bracket
The range of taxable income that is taxable at a certain rate. Currently, there are six marginal tax
brackets: 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, and 35 percent.

Marital Deduction
A provision of the tax codes that allows all assets of a deceased spouse to pass to the surviving spouse
free of estate taxes. This provision is also referred to as the "unlimited marital deduction." The marital
deduction may not apply in the case of noncitizens.

Maturity Date
The Maturity Date is the date on which income payments will begin from your annuity. With the
exception of contracts that have a fixed Maturity Date which cannot be changed, the Maturity Date will
automatically be set at the maximum Maturity Date allowed in your state, provided you have not
requested a specific date on the annuity application. Please refer to your contract for the Maturity Date
provision applicable to your annuity.


                                                                                                               Page 40
Lisa M. Winward - lwinward@sammonsrep.com - affinitywealthsolutions.net
1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™
Medical Loss Ratio
Total health benefits divided by total premium.

Member Month
Total number of health plan participants who are members for each month.




                                                                                                               Page 41
Lisa M. Winward - lwinward@sammonsrep.com - affinitywealthsolutions.net
1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™
Money Market Fund
A mutual fund that specializes in investing in short-term securities and tries to maintain a constant net
asset value of $1. Money-market funds are neither insured nor guaranteed by the Federal Deposit
Insurance Corporation (FDIC) or any government agency. Although money market funds seek to
preserve the value of your investment at $1 per share, it is possible to lose money when investing in a
money market fund.

Mortality and Expense Risk Fees
A charge that covers such annuity contract guarantees as death benefits.

Mortgage Insurance Policy
In life and health insurance, a policy covering a mortgagor with benefits intended to pay off the balance
due on a mortgage upon the insured's death, or to meet the payments due on a mortgage in case of the
insured's death or disability.

Municipal Bond
A debt security issued by municipalities. The income from municipal bonds is usually exempt from
federal income taxes. It may also be exempt from state income taxes in the state in which the municipal
bond is issued. Some municipal bond interest could be subject to the federal alternative minimum tax. If
you sell a municipal bond at a profit, you could incur capital gains taxes. Bond funds are subject to the
same inflation, interest-rate, and credit risks associated with their underlying bonds. As interest rates
rise, bond prices typically fall, which can adversely affect a bond fund's performance. The principal value
of bonds may fluctuate with market conditions. Bonds redeemed prior to maturity may be worth more
or less than their original cost.

Municipal Bond Fund
A mutual fund that specializes in investing in municipal bonds. Bond funds are subject to the same
inflation, interest-rate, and credit risks associated with their underlying bonds. As interest rates rise,
bond prices typically fall, which can adversely affect a bond fund's performance.

Mutual Fund
A collection of stocks, bonds, or other securities purchased and managed by an investment company
with funds from a group of investors. Mutual funds are sold only by prospectus. Please consider the
investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which
contains this and other information about the investment company, can be obtained from your financial
professional. Be sure to read the prospectus carefully before deciding whether to invest.

Mutual Insurance Companies
Companies with no capital stock, and owned by policyholders. The earnings of the company--over and
above the payments of the losses, operating expenses and reserves--are the property of the
policyholders. There are two types of mutual insurance companies. A nonassessable mutual charges a
fixed premium and the policyholders cannot be assessed further. Legal reserves and surplus are
maintained to provide payment of all claims. Assessable mutuals are companies that charge an initial
fixed premium and, if that isn't sufficient, might assess policyholders to meet losses in excess of the
premiums that have been charged.

                                                                                                               Page 42
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™




                                                                                                               Page 43
Lisa M. Winward - lwinward@sammonsrep.com - affinitywealthsolutions.net
1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™
Named Perils
Perils specifically covered on insured property.

National Association of Insurance Commissioners (NAIC)
Association of state insurance commissioners whose purpose is to promote uniformity of insurance
regulation, monitor insurance solvency and develop model laws for passage by state legislatures.

Net Asset Value
The per-share value of a mutual fund's current holdings. The net asset value is calculated by dividing the
net market value of the fund's assets by the number of outstanding shares.

Net Income
The total after-tax earnings generated from operations and realized capital gains as reported in the
company's NAIC annual statement on page 4, line 16.

Net Investment Income
This item represents investment income earned during the year less investment expenses and
depreciation on real estate. Investment expenses are the expenses related to generating investment
income and capital gains but exclude income taxes.

Net Leverage
The sum of a company's net premium written to policyholder surplus and net liabilities to policyholder
surplus. This ratio measures the combination of a company's net exposure to pricing errors in its current
book of business and errors of estimation in its net liabilities after reinsurance, in relation to
policyholder surplus.

Net Liabilities to Policyholder Surplus
Net liabilities expressed as a ratio to policyholder surplus. Net liabilities equal total liabilities less
conditional reserves, plus encumbrances on real estate, less the smaller of receivables from or payable
to affiliates. This ratio measures company's exposures to errors of estimation in its loss reserves and all
other liabilities. Loss-reserve leverage is generally the key component of net liability leverage. The
higher the loss-reserve leverage the more critical a company's solvency depends upon maintaining
reserve adequacy.

Net Premium
The amount of premium minus the agent's commission. Also, the premium necessary to cover only
anticipated losses, before loading to cover other expenses.
Net Premiums Earned - The adjustment of net premiums written for the increase or decrease of the
company's liability for unearned premiums during the year. When an insurance company's business
increases from year to year, the earned premiums will usually be less than the written premiums. With
the increased volume, the premiums are considered fully paid at the inception of the policy so that, at
the end of a calendar period, the company must set up premiums representing the unexpired terms of
the policies. On a decreasing volume, the reverse is true.

Net Premiums Written

                                                                                                               Page 44
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
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Represents gross premium written, direct and reinsurance assumed, less reinsurance ceded.




                                                                                                               Page 45
Lisa M. Winward - lwinward@sammonsrep.com - affinitywealthsolutions.net
1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
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Net Underwriting Income
Net premiums earned less incurred losses, loss-adjustment expenses, underwriting expenses incurred,
and dividends to policyholders

Net Worth
In business, net worth (sometimes called net liabilities or equity funds) is the total assets minus total
outside liabilities of an individual or a company or Equity capital plus all reserves and surpluses. For a
company, this is called shareholders' preference and may be referred to as book value. Net worth is
stated as at a particular year in time. In the case of an individual, the term estate is used. That term is
used especially in the context of fraudulent law and in relation to probate, on the death of the company.
In personal finance, net worth (or wealth) refers to an individual's net economic position; similarly, it
uses the value of all assets (long term assets) minus the value of all liabilities.
Net worth in business is generally based on the value of all assets and liabilities at the carrying value
which is the value as expressed on the financial statements. To the extent items on the balance sheet do
not express their true (market) value, the net worth will also be inaccurate.
Net worth in this formulation is not an expression of the market value of the firm: the firm may be
worth more (or less) if sold as a going concern. On reading the balance sheet, if the accumulated losses
is more than the shareholder's equity, it is a clear case of negative net worth.

Non-Qualified Funds
Funds that have already been taxed. Non-qualified funds provide for the cost basis in the policy.
Nonstandard Auto (High Risk Auto or Substandard Auto). Insurance for motorists who have poor driving
records or have been canceled or refused insurance. The premium is much higher than standard auto
due to the additional risks.

Net Premiums Written to Policyholder Surplus
This ratio measures a company's net retained premiums written after reinsurance assumed and ceded,
in relation to its surplus. This ratio measures the company's exposure to pricing errors in its current book
of business.

Non-Recourse Mortgage
A home loan in which the borrower can never owe more than the home's value at the time the loan is
repaid.

Noncancellable
Contract terms, including costs that can never be changed.

Occurrence
An event that results in an insured loss. In some lines of business, such as liability, an occurrence is
distinguished from accident in that the loss doesn't have to be sudden and fortuitous and can result
from continuous or repeated exposure which results in bodily injury or property damage neither
expected not intended by the insured.




                                                                                                               Page 46
Lisa M. Winward - lwinward@sammonsrep.com - affinitywealthsolutions.net
1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™
Operating Cash Flow
Measures the funds generated from insurance operations, which includes the change in cash and
invested assets attributed to underwriting activities, net investment income and federal income taxes.
This measure excludes stockholder dividends, capital contributions, unrealized capital gains/losses and
various noninsurance related transactions with affiliates. This test measures a company's ability to meet
current obligations through the internal generation of funds from insurance operations. Negative
balances might indicate unprofitable underwriting results or low yielding assets.

Operating Ratio
Combined ratio less the net investment income ratio (net investment income to net premiums earned).
The operating ratio measures a company's overall operational profitability from underwriting and
investment activities. This ratio doesn't reflect other operating income/expenses, capital gains or
income taxes. An operating ratio of more than 100 indicates a company is unable to generate profits
from its underwriting and investment activities.

Other Income/Expenses
This item represents miscellaneous sources of operating income or expenses that principally relate to
premium finance income or charges for uncollectible premium and reinsurance business.

Out-of-Pocket Limit
A predetermined amount of money that an individual must pay before insurance will pay 100% for an
individual's health-care expenses.

Overall Liquidity Ratio
Total admitted assets divided by total liabilities less conditional reserves. This ratio indicates a
company's ability to cover net liabilities with total assets. This ratio doesn't address the quality and
marketability of premium balances, affiliated investments and other uninvested assets.

Own Occupation
Insurance contract provision that allows policyholders to collect benefits if they can no longer work in
their own occupation.

Owner
The person or entity to whom the contract is issued, who is entitled to exercise all rights and privileges
under the contract.

Paid-Up Additional Insurance
An option that allows the policyholder to use policy dividends and/or additional premiums to buy
additional insurance on the same plan as the basic policy and at a face amount determined by the
insured's attained age.




                                                                                                               Page 47
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™
Parental Rights
All of the legal rights, and the corresponding legal obligations, that go along with being the parent of a
child, which include: the right to legal and physical custody of the child, the right to physical access or
visitation with the child, the right to inherit property from the child and to have the child inherit
property from the parent, the right to consent to medical care and treatment for the child, the right to
consent to the marriage of the child or its enlistment in military service, the ability to contract on behalf
of the child, the obligation to provide financial support for the child, the responsibility to provide a legal
defense of the child in legal proceedings, the obligation to care for, direct and supervise the child, the
obligation to be legally liable for certain damages caused by the child, the obligation to see that the child
attends school, and the obligation to protect the child and provide a safe living environment for the
child.

Participation Rate
In equity-indexed annuities, a participation rate determines how much of the gain in the index will be
credited to the annuity. For example, the insurance company may set the participation rate at 80%,
which means the annuity would only be credited with 80% of the gain experienced by the index.

Payable On Death - POD
POD accounts are created by filling out the proper forms at your bank or credit union. It is a cost-free
service that allows for the transfer of all checking and savings accounts, security deposits, savings bonds
and other deposit certificates. A POD account is very similar to a transfer-on-death arrangement, but
deals with a person's bank assets instead of their stocks, bonds, mutual funds or other assets. Both POD
and TOD agreements offer quick means of asset dispersement, as both avoid the probate process, which
can take several months.

Peril
The cause of a possible loss.

Personal Injury Protection
Pays basic expenses for an insured and his or her family in states with no-fault auto insurance. No-fault
laws generally require drivers to carry both liability insurance and personal injury protection coverage to
pay for basic needs of the insured, such as medical expenses, in the event of an accident.

Personal Lines
Insurance for individuals and families, such as private-passenger auto and homeowners insurance.

Point-of-Service Plan
Health insurance policy that allows the employee to choose between in-network and out-of-network
care each time medical treatment is needed.

Policy
The written contract effecting insurance, or the certificate thereof, by whatever name called, and
including all clause, riders, endorsements, and papers attached thereto and made a part thereof.

Policyholder Dividend Ratio

                                                                                                               Page 48
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
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The ratio of dividends to policyholders related to net premiums earned.




                                                                                                               Page 49
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
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Policyholder Surplus
The sum of paid in capital, paid in and contributed surplus, and net earned surplus, including voluntary
contingency reserves. It also is the difference between total admitted assets and total liabilities.
Policy or Sales Illustration- Material used by an agent and insurer to show how a policy may perform
under a variety of conditions and over a number of years.

Pooled Income Fund
A trust created by a charitable organization that combines the contributions of several donors and
distributes income to those donors based on the earnings of the trust. The trust is managed by the
charitable organization, and contributions are partially deductible for income tax purposes.

Portfolio
All the investments held by an individual or a mutual fund.

Power of Attorney
A power of attorney may be special or limited to one specified act or type of act, or it may be general, and
whatever it defines as its scope is what a court will enforce as being its scope. (It may also be limited as to
time.) Under the common law, a power of attorney becomes ineffective if its grantor dies or becomes
"incapacitated," meaning unable to grant such a power, because of physical injury or mental illness, for
example, unless the grantor (or principal) specifies that the power of attorney will continue to be effective
even if the grantor becomes incapacitated (but any such power ends when the grantor dies). This type of
power of attorney is called a durable power of attorney.




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 Pre-Existing Condition
A coverage limitation included in many health policies which states that certain physical or mental
conditions, either previously diagnosed or which would normally be expected to require treatment prior
to issue, will not be covered under the new policy for a specified period of time.

Preferred Auto
Auto coverage for drivers who have never had an accident and operates vehicles according to law. Drivers
are not a risk for any insurance company that writes auto insurance, and no insurance company would be
afraid to take them on as risk.

Preferred Provider Organization
Network of medical providers who charge on a fee-for-service basis, but are paid on a negotiated,
discounted fee schedule.

Premium
The price of insurance protection for a specified risk for a specified period of time.

Premium Balances
Premiums and agents' balances in course of collection; premiums, agents' balances and installments
booked but deferred and not yet due; bills receivable, taken for premiums and accrued retrospective
premiums.

Premium Earned
The amount of the premium that as been paid for in advance that has been "earned" by virtue of the fact
that time has passed without claim. A three-year policy that has been paid in advance and is one year old
would have only partly earned the premium.

Premium to Surplus Ratio
This ratio is designed to measure the ability of the insurer to absorb above-average losses and the
insurer's financial strength. The ratio is computed by dividing net premiums written by surplus. An
insurance company's surplus is the amount by which assets exceed liabilities. The ratio is computed by
dividing net premiums written by surplus. For example, a company with $2 in net premiums written for
every $1 of surplus has a 2-to-1 premium to surplus ratio. The lower the ratio, the greater the company's
financial strength. State regulators have established a premium-to-surplus ratio of no higher than 3-to-1 as
a guideline.

Premium Unearned
That part of the premium applicable to the unexpired part of the policy period.

Pretax Operating Income
Pretax operating earnings before any capital gains generated from underwriting, investment and other
miscellaneous operating sources.

Pretax Return on Revenue

                                                                                                               Page 51
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A measure of a company's operating profitability and is calculated by dividing pretax operating earnings by
net premiums earned.


Preferred Stock
A class of stock with claim to a company's earnings, before payment can be made on the common stock,
and that is usually entitled to priority over common stock if the company liquidates. Generally, preferred
stocks pay dividends at a fixed rate.

Pre 59 1/2 withdrawals (IRS Rule 72t
Early distributions from your retirement plan that must be "substantially equal" payments based upon
one of the three methods approved by the IRS. Once the distributions begin, they must continue for a
period of five years or until you reach age 59 1/2, whichever is longest.

Premium Tax
A tax charged by certain states or any other governmental authority on either the premium payment or
value of the Separate Account.

Premium Unearned
That part of the premium applicable to the unexpired part of the policy period.

Prenuptial Agreement
A legal agreement arranged before marriage stating who owns property acquired before marriage and
during marriage and how property will be divided in the event of divorce. ERISA benefits are not
affected by prenuptial agreements.

Pretax Operating Income
Pretax operating earnings before any capital gains generated from underwriting, investment and other
miscellaneous operating sources.

Pretax Return on Revenue
A measure of a company's operating profitability and is calculated by dividing pretax operating earnings
by net premiums earned.

Price/Earnings Ratio (P/E Ratio)
The market price of a stock divided by the company's annual earnings per share. Because the P/E ratio is
a widely regarded yardstick for investors, it often appears with stock price quotations.

Principal
In a security, the principal is the amount of money that is invested, excluding earnings. In a debt
instrument such as a bond, it is the face amount.

Private Foundation
A tax-exempt organization created for the purpose of ongoing charitable giving. You are limited to a tax
deduction of 30% of your adjusted gross income ("AGI") for cash gifts and 20% of your adjusted gross

                                                                                                               Page 52
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income ("AGI") for most property gifts compared to 50% and 30% limitations for contributions to a
public charity.




                                                                                                               Page 53
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Private-Passenger Auto Insurance Policyholder Risk Profile
This refers to the risk profile of auto insurance policyholders and can be divided into three categories:
standard, nonstandard and preferred. In the eyes of an insurance company, it is the type of business (or
the quality of driver) that the company has chosen to taken on.

Probate
The court-supervised process in which a decedent's estate is settled and distributed.

Profit
A measure of the competence and ability of management to provide viable insurance products at
competitive prices and maintain a financially strong company for both policyholders and stockholders.

Profit-Sharing Plan
An agreement under which employees share in the profits of their employer. The company makes
annual contributions to the employees' accounts. These funds usually accumulate tax deferred until the
employee retires or leaves the company.

Prospectus
A document provided by investment companies to prospective investors. The prospectus gives
information needed by investors to make informed decisions prior to investing in a specific mutual fund,
variable annuity, or variable universal life insurance. The prospectus includes information on the
minimum investment amount, the investment company's objectives, past performance, risk level, sales
charges, management fees, and any other expense information about the investment company, as well
as a description of the services provided to investors in the investment company.

Protected Cell Company (PCC)
A PCC is a single legal entity that operates segregated accounts, or cells, each of which is legally
protected from the liabilities of the company's other accounts. An individual client's account is insulated
from the gains and losses of other accounts, such that the PCC sponsor and each client are protected
against liquidation activities by creditors in the event of insolvency of another client.

Quick Assets
Assets that are quickly convertible into cash.

Quick Liquidity Ratio
Quick assets divided by net liabilities plus ceded reinsurance balances payable. Quick assets are defined
as the sum of cash, unaffiliated short-term investments, unaffiliated bonds maturing within one year,
government bonds maturing within five years, and 80% of unaffiliated common stocks. These assets can
be quickly converted into cash in the case of an emergency.

Qualified Domestic Relations Order (QDRO)




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At the time of divorce, this order would be issued by a state domestic relations court and would require
that an employee's ERISA retirement plan accrued benefits be divided between the employee and the
spouse.

Qualified Funds
Funds that have not been taxed.

Qualified High-Deductible Health Plan
A health plan with lower premiums that covers health-care expenses only after the insured has paid
each year a large amount out of pocket or from another source. To qualify as a health plan coupled with
a Health Savings Account, the Internal Revenue Code requires the deductible to be at least $1,000 for an
individual and $2,000 for a family. High-deductible plans are also known as catastrophic plans.

Qualified personal residence trust (QPRT)
A trust designed for the transfer of ownership of a residence to reduce estate tax. The transaction may,
however, incur gift tax.

Qualified Retirement Plan
A pension, profit-sharing, or qualified savings plan that is established by an employer for the benefit of
the employees. These plans must be established in conformity with IRS rules. Contributions accumulate
tax deferred until withdrawn and are deductible to the employer as a current business expense.

Qualified Terminable Interest Property (QTIP) trust
Have children from a previous marriage? Then a QTIP trust may be something to consider. In
general, this type of trust is used to provide income for your surviving spouse. Upon the spouse's
death, the assets would then go to the children from the first marriage. A QTIP trust qualifies for
the marital deduction for federal estate tax purposes.

Qualified Versus Non-Qualified Policies
Qualified plans are those employee benefit plans that meet Internal Revenue Service requirements as
stated in IRS Code Section 401a. When a plan is approved, contributions made by the employer are tax
deductible expenses.

Real Estate Qualifying Event
An occurrence that triggers an insured's protection.

Reciprocal Insurance Exchange
An unincorporated groups of individuals, firms or corporations, commonly termed subscribers, who
mutually insure one another, each separately assuming his or her share of each risk. Its chief
administrator is an attorney-in-fact.

REIT - Real Estate Investment Trust
A corporation or trust that uses the pooled capital of many investors to purchase and manage income
property (equity REIT) and/or mortgage loans (mortgage REIT). REITs are traded on major exchanges just
like stocks. They are also granted special tax considerations. REITs offer several benefits over actually

                                                                                                               Page 55
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owning properties. First, they are highly liquid, unlike traditional real estate. Second, REITs enable
sharing in non-residential properties as well, such as hotels, malls, and other commercial or industrial
properties. Third, there's no minimum investment with REITs. REITs do not necessarily increase and
decrease in value along with the broader market. However, they pay yields in the form of dividends no
matter how the shares perform. REITs can be valued based upon fundamental measures, similar to the
valuation of stocks, but different numbers tend to be important for REITs than for stocks.

Re-Entry
Re-entry, which is the allowance for level-premium term policyowners to qualify for another level-
premium period, generally with new evidence of insurability.

Reinsurance
In effect, insurance that an insurance company buys for its own protection. The risk of loss is spread so a
disproportionately large loss under a single policy doesn't fall on one company. Reinsurance enables an
insurance company to expand its capacity; stabilize its underwriting results; finance its expanding
volume; secure catastrophe protection against shock losses; withdraw from a line of business or a
geographical area within a specified time period.

Reinsurance Ceded
The unit of insurance transferred to a reinsurer by a ceding company.

Reinsurance Recoverables to Policyholder Surplus
Measures a company's dependence upon its reinsurers and the potential exposure to adjustments on
such reinsurance. Its determined from the total ceded reinsurance recoverables due from non-U.S.
affiliates for paid losses, unpaid losses, losses incurred but not reported (IBNR), unearned premiums and
commissions less funds held from reinsurers expressed as a percent of policyholder surplus.

Renewal
The automatic re-establishment of in-force status effected by the payment of another premium.

Replacement Cost
The dollar amount needed to replace damaged personal property or dwelling property without
deducting for depreciation but limited by the maximum dollar amount shown on the declarations page
of the policy.

Required Minimum Distributions (RMDs)
Annual amounts that participants in qualified retirement plans and owners of traditional individual
retirement arrangements (IRAs) must begin to receive by the year following the year the person turns
age 70 1/2. Also known as minimum required distributions (MRD).

Reserve
An amount representing actual or potential liabilities kept by an insurer to cover debts to policyholders.
A reserve is usually treated as a liability.

Residual Benefit

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In disability insurance, a benefit paid when you suffer a loss of income due to a covered disability or if
loss of income persists. This benefit is based on a formula specified in your policy and it is generally a
percentage of the full benefit. It may be paid up to the maximum benefit period.




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Retained Asset Account:
A completely liquid, interest-earning account established for beneficiaries to invest their funds, allowing
time to make decisions on future plans.
Return on Policyholder Surplus (Return on Equity) - The sum of after-tax net income and unrealized
capital gains, to the mean of prior and current year-end policyholder surplus, expressed as a percent.
This ratio measures a company's overall after-tax profitability from underwriting and investment
activity.

Return on investment (ROI)
The rate of revenues received for every dollar invested in an item or activity. In a marketing sense,
knowing the ROI of your advertising and marketing campaigns helps you to identify which techniques
are most effective in generating income for your business.

Return on Policyholder Surplus (Return on Equity)
The sum of after-tax net income and unrealized capital gains, to the mean of prior and current year-end
policyholder surplus, expressed as a percent. This ratio measures a company's overall after-tax
profitability from underwriting and investment activity.

Revocable Trust
A trust in which the creator reserves the right to modify or terminate the trust.

Revocable Trust (Living Trust)
A trust that gives you the ability to pass trust assets to your beneficiaries without the delay or
expense of probate. Want to retain control of your assets during your lifetime? Then consider a
"revocable" trust. Just remember that because the assets in the trust remain under your control
while you are alive, they're subject to estate taxes when you die. Upon your death, the trust
becomes irrevocable.

Riders
An addition to an annuity contract that becomes a part of the annuity contract and that is as legally
effective as any other part of the contract. Riders usually expand or limit the benefits under the
contract.

Risk
The chance that an investor will lose all or part of an investment.

Risk-Averse
Refers to the assumption that rational investors will choose the security with the least risk if they can
maintain the same return. As the level of risk goes up, so must the expected return on the investment.

Risk Class
Risk class, in insurance underwriting, is a grouping of insureds with a similar level of risk. Typical
underwriting classifications are preferred, standard and substandard, smoking and nonsmoking, male
and female.

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Risk Management
Management of the pure risks to which a company might be subject. It involves analyzing all exposures
to the possibility of loss and determining how to handle these exposures through practices such as
avoiding the risk, retaining the risk, reducing the risk, or transferring the risk, usually by insurance.

Risk Retention Groups
Liability insurance companies owned by their policyholders. Membership is limited to people in the
same business or activity, which exposes them to similar liability risks. The purpose is to assume and
spread liability exposure to group members and to provide an alternative risk financing mechanism for
liability. These entities are formed under the Liability Risk Retention Act of 1986. Under law, risk
retention groups are precluded from writing certain coverage, most notably property lines and workers'
compensation. They predominately write medical malpractice, general liability, professional liability,
products liability and excess liability coverage. They can be formed as a mutual or stock company, or a
reciprocal.

Revocation of Power of Attorney
Allows you to revoke a power of attorney document.

Rollover
A method by which an individual can transfer the assets from one retirement program to another
without the recognition of income for tax purposes. The requirements for a rollover depend on the type
of program from which the distribution is made and the type of program receiving the distribution.

Roth IRA
A nondeductible IRA that allows tax-free withdrawals when certain conditions are met. Income and
contribution limits apply.

Roth 40l(k)
A contribution-based retirement account, which combines features of the traditional Roth IRA and
401(k) plan accounts. The Roth 401(k) contains many benefits for employees, such as being able to
contribute post-tax money, but many companies do not yet offer this as a retirement plan option, due
to the increased amount of work it takes to maintain this plan. Companies were given the option to
begin offering this plan in 2006.

Secondary Market
The secondary market is populated by buyers willing to pay what they determine to be fair market
value.

Section 1035 exchange
In the United States, a tax-free replacement of an insurance contract for another insurance contract or
annuity covering the same person that is performed in accordance with the conditions of Section 1035
of the Internal Revenue Code.

Section 7702

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Part of the Internal Revenue Code that defines the conditions a life policy must satisfy to qualify as a life
insurance contract, which has tax advantages.

Security
Evidence of an investment, either in direct ownership (as with stocks), creditorship (as with bonds), or
indirect ownership (as with options).

Separate Account
In the United States, an investment account that is subject to risk based on market performance placed
in variable insurance products such as variable annuities. The contract owner assumes all risk for funds
invested in the separate account.

Simplified Employee Pension Individual Retirement Account (SEP IRA)
A variation of the Individual Retirement Account. SEP IRAs are adopted by business owners to provide
retirement benefits for the business owners and their employees. Contributions may be made up to a
certain limit and are immediately vested. There are no significant administration costs for self-employed
person with no employees. If the self-employed person does have employees, all employees must
receive the same benefits under an SEP plan. Since SEP accounts are treated as IRAs, funds can be
invested the same way as any other IRA. For a detailed reading on SEPs, see IRS Pub 560

SIMPLE IRA
A type of tax-advantaged employer-provided retirement plan in the United States that allows employees
to set aside money and invest it to grow for later use. Specifically, it is a type of Individual Retirement
Account that is set up to be an employer-provided plan. It is an employer sponsored plan, like more
well-known plans such as the 401(k) (profit-sharing plans) and 403(b) (Tax Sheltered Annuity plans), but
offers simpler and less costly administration rules. Like a 401(k) plan, the SIMPLE IRA is funded by a
pretax salary reduction. Like other salary reduction contributions, these deductions are subject to social
security, Medicare, and FUTA taxes. Contribution limits for SIMPLE plans are lower than for most other
types of employer-provided retirement plans: $11,500 for 2010, as compared to $16,500 for convention
defined contribution plans (Section 402(g) limit) like 401(k), 401(a), and 403(b) plans. For the non-profit
501(c)(3) employer, there is no advantage in establishing a SIMPLE plan over a 403(b) plan since the
403(b) does not require any more expensive administration.

                                                 Contribution Limits
                                                 Year          Under Age 50        Age 50 or Older
                                                 2005          $10,000             $12,000
                                                 2006          $10,000             $12,500
                                                 2007          $10,500             $13,000
                                                 2008          $10,500             $13,000
                                                 2009          $11,500             $14,000
                                                 2010          $11,500             $14,000


Single-Life Annuity

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An insurance-based contract that provides future payments at regular intervals in exchange for current
premiums. Generally used as a supplement to retirement income and pays over the life of one
individual, usually the retiree, with no rights of payment to any survivor.




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Solo 40l(k)
A solo 401(k) plan is a regular 401(k) plan combined with a profit-sharing plan. However, unlike a regular
401(k) plan, a solo 401(k) plan can be implemented only by self-employed individuals or small business
owners who have no other full-time employees (an exception applies if your full-time employee is your
spouse). If you have full-time employees age 21 or older (other than your spouse) or part-time
employees who work more than 1,000 hours a year, you will typically have to include them in any plan
you set up, so adopting a solo 401(k) plan will not be a viable option.
Note: A solo 401(k) plan isn't really a different kind of 401(k) plan. Rather, it simply takes advantage of
the fact that relaxed rules apply when the only individuals who participate in the plan are the owner and
the owner's spouse.

Solvency
Having sufficient assets--capital, surplus, reserves--and being able to satisfy financial requirements--
investments, annual reports, examinations--to be eligible to transact insurance business and meet
liabilities.

Special Power of Attorney
Authorizes your Agent to act on your behalf in specific situations only.

Split-Dollar Plan
An arrangement under which two parties (usually a corporation and employee) share the cost of a life
insurance policy and split the proceeds.

Spousal IRA
An IRA designed for a couple when one spouse has no earned income. The maximum combined
contribution that can be made each year to and IRA and a spousal IRA is $10,000 in 2009 or 100 percent
of earned income, whichever is less. The total may be split between the two IRAs as the couple wishes,
provided that the contribution to either IRA does not exceed the maximum annual contribution limit
($5,000 in 2009).

Standard Auto
Auto insurance for average drivers with relatively few accidents during lifetime.

State of Domicile
The state in which the company is incorporated or chartered. The company also is licensed (admitted)
under the state's insurance statutes for those lines of business for which it qualifies.

Statutory Reserve
A reserve, either specific or general, required by law.

Stock
An investment that represents a share of ownership (equity) in a corporation, including common stock,
preferred stock and warrants. Stocks are also known as "equities."


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Stock Insurance Company
An incorporated insurer with capital contributed by stockholders, to whom earnings are distributed as
dividends on their shares.

Stop Loss
Any provision in a policy designed to cut off an insurer's losses at a given point.

Subaccount
One of several alternative pools of investments within an insurer’s separate or segregated account into
which a variable contract owner may allocate premiums paid. Also known as variable investment
account and variable subaccount.

Subaccount Charge
The fee to manage a subaccount, which is an investment option in variable products that is separate
from the general account.

Subrogation
The right of an insurer who has taken over another's loss also to take over the other person's right to
pursue remedies against a third party.

Successive Periods
In hospital income protection, when confinements in a hospital are due to the same or related causes
and are separated by less than a contractually stipulated period of time, they are considered part of the
same period of confinement.

Surplus
The amount by which assets exceed liabilities.

Surrender Charge
An amount charged to an annuity contract owner when he prematurely withdraws a portion or all of the
contract’s accumulated value (over any penalty free amount). Also known as back-end load, contingent
deferred sales load, and withdrawal charge.

Surrender Period
A set amount of time during which you have to keep the majority of your money in an annuity contract.
Most surrender periods last from five to 10 years. Most contracts will allow you to take out at least 10%
a year of the accumulated value of the account, even during the surrender period. If you take out more
than that 10%, you will have to pay a surrender charge on the amount that you have withdrawn above
that 10%.

Tax Bracket
The range of taxable income that is taxed at a certain rate. Brackets are expressed by their marginal
rate.

Tax Credit

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Tax credits, the most appealing type of tax deductions, are subtracted directly, dollar for dollar, from
your income tax bill.




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Tax Deferred
Interest, dividends, or capital gains that grow untaxed in certain accounts or plans until they are
withdrawn.

Tax-Exempt Bonds
Under certain conditions, the interest from bonds issued by states, cities, and certain other government
agencies is exempt from federal income taxes. In many states, the interest from tax-exempt bonds will
also be exempt from state and local income taxes. If you sell a tax-exempt bond at a profit, you could
incur capital gains taxes. Some tax-exempt bond interest could be subject to the federal alternative
minimum tax. The principal value of bonds may fluctuate with market conditions. Bonds redeemed prior
to maturity may be worth more or less than their original cost.

Taxable Income
The amount of income used to compute tax liability. It is determined by subtracting adjustments,
itemized deductions or the standard deduction, and personal exemptions from gross income.

Technical Analysis
An approach to investing in stocks in which a stock's past performance is mapped onto charts. These
charts are examined to find familiar patterns to use as an indicator of the stock's future performance.

Tenancy in Common
A form of co-ownership. Upon the death of a co-owner, his or her interest passes to the designated
beneficiaries and not to the surviving owner or owners.

Tenants by Entirety
A registration in which each owner has a full interest in the account. Upon the death of one owner, the
account passes to the survivor. This registration is restricted to spousal accounts and is not available in
all states.

Tenants in common
Describes a situation where two or more people own property without rights of survivorship. In this
case, each tenant's ownership interest can be distributed to the beneficiaries they designate in their will.

Term Life Insurance
Life insurance that provides protection for a specified period of time. Common policy periods are one
year, five years, 10 years or until the insured reaches age 65 or 70. The policy doesn't build up any of the
nonforfeiture values associated with whole life policies.

Testamentary Trust
A trust established by a will that takes effect upon death.

Testator
One who has made a will or who dies having left a will.


                                                                                                               Page 66
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1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™




                                                                                                               Page 67
Lisa M. Winward - lwinward@sammonsrep.com - affinitywealthsolutions.net
1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™
Tort
 A private wrong, independent of contract and committed against an individual, which gives rise to a
legal liability and is adjudicated in a civil court. A tort can be either intentional or unintentional, and
liability insurance is mainly purchased to cover unintentional torts.

Total Admitted Assets
This item is the sum of all admitted assets, and are valued in accordance with state laws and regulations,
as reported by the company in its financial statements filed with state insurance regulatory authorities.
This item is reported net as to encumbrances on real estate (the amount of any encumbrances on real
estate is deducted from the value of the real estate) and net as to amounts recoverable from reinsurers
(which are deducted from the corresponding liabilities for unpaid losses and unearned premiums).

Total Annual Loan Cost
The projected annual average cost of a reverse mortgage including all itemized costs.

Total Loss
A loss of sufficient size that it can be said no value is left. The complete destruction of the property. The
term also is used to mean a loss requiring the maximum amount a policy will pay.

Total Return
The total of all earnings from a given investment, including dividends, interest, and any capital gain.

Transfer On Death - TOD
A way of designating beneficiaries to receive your assets at the time of your death without having to go
through probate. This designation also allows you to specify the percentage of assets each person or
entity (your "TOD beneficiary") will receive. Your assets will then be automatically transferred to the
designated beneficiaries upon your death.

Trust
A legal entity created by an individual in which one person or institution holds the right to manage
property or assets for the benefit of someone else. Types of trusts include: Testamentary Trust – A trust
established by a will that takes effect upon death; Living Trust – A trust created by a person during his or
her lifetime; Revocable Trust - A trust in which the creator reserves the right to modify or terminate the
trust; Irrevocable Trust – A trust that may not be modified or terminated by the trustor after its creation

Trustee
An individual or institution appointed to administer a trust for its beneficiaries.

Trust-Owned Life Insurance - TOLI
Life insurance that resides inside a trust. Trust-owned life insurance is used by many high net worth
individuals as the cornerstone of their estate plan. It enables the trust to provide for survivors, cover
estate tax liability planning, balance inheritances among heirs and meet charitable objectives.

Trustee-to-Trustee Transfer


                                                                                                               Page 68
Lisa M. Winward - lwinward@sammonsrep.com - affinitywealthsolutions.net
1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™
A method of transferring retirement plan assets from one employer's plan to another employer plan or
to an IRA. One benefit of this method is that no federal income tax will be withheld by the trustee of the
first plan.




                                                                                                               Page 69
Lisa M. Winward - lwinward@sammonsrep.com - affinitywealthsolutions.net
1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™


Umbrella Policy
Coverage for losses above the limit of an underlying policy or policies such as homeowners and auto
insurance. While it applies to losses over the dollar amount in the underlying policies, terms of coverage
are sometimes broader than those of underlying policies.

Unaffiliated Investments
These investments represent total unaffiliated investments as reported in the exhibit of admitted assets.
It is cash, bonds, stocks, mortgages, real estate and accrued interest, excluding investment in affiliates
and real estate properties occupied by the company.

Underwriter
The individual trained in evaluating risks and determining rates and coverages for them. Also, an insurer.

Underwriting
The process of selecting risks for insurance and classifying them according to their degrees of insurability
so that the appropriate rates may be assigned. The process also includes rejection of those risks that do
not qualify.

Underwriting Expenses Incurred
Expenses, including net commissions, salaries and advertising costs, which are attributable to the
production of net premiums written.

Underwriting Expense Ratio
This represents the percentage of a company's net premiums written that went toward underwriting
expenses, such as commissions to agents and brokers, state and municipal taxes, salaries, employee
benefits and other operating costs. The ratio is computed by dividing underwriting expenses by net
premiums written. The ratio is computed by dividing underwriting expenses by net premiums written. A
company with an underwriting expense ratio of 31.3% is spending more than 31 cents of every dollar of
net premiums written to pay underwriting costs. It should be noted that different lines of business have
intrinsically differing expense ratios. For example, boiler and machinery insurance, which requires a
corps of skilled inspectors, is a high expense ratio line. On the other hand, expense ratios are usually low
on group health insurance.

Underwriting Guide
Details the underwriting practices of an insurance company and provides specific guidance as to how
underwriters should analyze all of the various types of applicants they might encounter. Also called an
underwriting manual, underwriting guidelines, or manual of underwriting policy.

Unearned Premiums
That part of the premium applicable to the unexpired part of the policy period.

Uniform Gifts to Minors Act (UGMA)
A state law that allows adults to contribute to a custodial account in the name of a minor beneficiary
without having to establish a trust or name a legal guardian. Funds transferred to an UGMA or UTMA

                                                                                                               Page 70
Lisa M. Winward - lwinward@sammonsrep.com - affinitywealthsolutions.net
1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™
account are irrevocable gifts to the minor and may only be used for the benefit of the minor. See also
Uniform Transfers to Minors Act.

Uniform Transfers to Minors Act (UTMA)
A state law that extends the coverage of the Uniform Gifts to Minors Act so that transfers to a custodial
account in the name of the minor beneficiary may be simplified. Funds transferred to an UGMA or
UTMA account are irrevocable gifts to the minor and may only be used for the benefit of the minor.

Uninsured Motorist Coverage
Endorsement to a personal automobile policy that covers an insured collision with a driver who does not
have liability insurance.

Universal Life Insurance
A type of life insurance that combines a death benefit with a savings element that accumulates tax
deferred at current interest rates. Under a universal life insurance policy, the policyholder can increase
or decrease his or her coverage, with limitations, without purchasing a new policy. It is a type of flexible
permanent life insurance offering the low-cost protection of term life insurance as well as a savings
element (like whole life insurance) which is invested to provide a cash value buildup. The death benefit,
savings element and premiums can be reviewed and altered as a policyholder's circumstances change. In
addition, unlike whole life insurance, universal life insurance allows the policyholder to use the interest
from his or her accumulated savings to help pay premiums.

Unlimited marital deduction
Under current federal law, the amount one spouse can transfer to another free of estate tax (provided
the recipient is a US citizen) is unlimited.

Usual, Customary and Reasonable Fees
An amount customarily charged for or covered for similar services and supplies which are medically
necessary, recommended by a doctor or required for treatment.

Utilization
How much a covered group uses a particular health plan or program.

Valuation
A calculation of the policy reserve in life insurance. Also, a mathematical analysis of the financial
condition of a pension plan.

Valuation Reserve
A reserve against the contingency that the valuation of assets, particularly investments, might be higher
than what can be actually realized or that a liability may turn out to be greater than the valuation placed
on it.

Variable Annuity
An annuity under which the amount of the accumulated value and the amount of the periodic annuity
benefit payments fluctuate in accordance with the performance of a specified pool of investments.

                                                                                                               Page 71
Lisa M. Winward - lwinward@sammonsrep.com - affinitywealthsolutions.net
1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™
Premiums paid for a variable annuity are deposited into an insurer’s separate account in the United
States. Within a Separate or Segregated Account, the insurer maintains many subaccounts that allow
the contract owner to invest in a wide variety of investments. The contract owner assumes the
investment risk for all funds in the separate account, while the insurer assumes the risk for all funds in
the general account (also known as a fixed account).

Variable Annuitization
The act of converting a variable annuity from the accumulation phase to the payout phase.

Variable Universal Life Insurance
A type of life insurance that combines a death benefit with an investment element that accumulates tax
deferred. The account value can be allocated into a variety of investment subaccounts. The investment
return and principal value of the variable subaccounts will fluctuate; thus, the policy's account value,
and possibly the death benefit, will be determined by the performance of the chosen subaccounts and is
not guaranteed. Withdrawals may be subject to surrender charges and are taxable if the account owner
withdraws more than his or her basis in the policy. Policy loans or withdrawals will reduce the policy's
cash value and death benefit and may require additional premium payments to keep the policy in force.
There may also be additional fees and charges associated with a VUL policy.

Viatical Settlement Provider
Someone who serves as a sales agent, but does not actually purchase policies.

Viator
The terminally ill person who sells his or her life insurance policy.

Volatility
The range of price swings of a security or market over time.

Waiting Period
Because most disability events are temporary, insurance coverage for them is cheaper when the
policyholder agrees to wait longer before receiving claim payments. For example, if you break a finger, it
may only be 2 months before you are able to do your job again. If you agreed to wait 60 days before
receiving claim payments, then the insurer will not have to pay a claim for your event. This reduction to
his risk is reflected in the lower price that you paid to purchase coverage (lower premiums).

Another important example in this category is that the standard waiting period before starting to collect
Social Security's disability benefits is one year.

Waiver of Premium
A provision in some insurance contracts which enables an insurance company to waive the collection of
premiums while keeping the policy in force if the policyholder becomes unable to work because of an
accident or injury. The waiver of premium for disability remains in effect as long as the ensured is
disabled.

Welfare Benefit Plan

                                                                                                               Page 72
Lisa M. Winward - lwinward@sammonsrep.com - affinitywealthsolutions.net
1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.
Affinity Wealth Solutions
Trusted financial guidance for your lifestyle ™
An employee benefit plan that provides such benefits as medical, sickness, accident, disability, death, or
unemployment benefits.

Whole Life Insurance
A type of life insurance that offers a death benefit and also accumulates cash value tax deferred at fixed
interest rates. Whole life insurance policies generally have a fixed annual premium that does not rise
over the duration of the policy. Whole life insurance is also referred to as "ordinary" or "straight" life
insurance. Policy loans will reduce the cash value by the amount of any outstanding loan balance plus
interest.

Will
A legal document that declares a person's wishes concerning the disposition of property, the
guardianship of his or her children, and the administration of the estate after his or her death.

Yield
Generally, the yield is the amount of current income provided by an investment. For stocks, the yield is
calculated by dividing the total of the annual dividends by the current price. For bonds, the yield is
calculated by dividing the annual interest by the current price. The yield is distinguished from the return,
which includes price appreciation or depreciation. Yield on Invested Assets
Annual net investment income after expenses, divided by the mean of cash and net invested assets. This
ratio measures the average return on a company's invested assets. This ratio is before capital
gains/losses and income taxes.

Zero-Coupon Bond
This type of bond makes no periodic interest payments but instead is sold at a steep discount from its
face value. Bondholders receive the face value of their bonds when they mature

If you're unable to find a term that you feel would be beneficial on this page, please call or email us. We
value your feedback and will work to implement suggested terms that we find appropriate. Midland
National is dedicated to improving consumer awareness. Please contact your certified financial
consultant before making any investment decisions.




                                                                                                               Page 73
Lisa M. Winward - lwinward@sammonsrep.com - affinitywealthsolutions.net
1828 East Fort Union Blvd. - Salt Lake City, UT 84121 - phone: 801.403.5230
Securities offered through Sammons Securities Company; Member FINRA/SIPC. Fee-based investment advisory services offered
through Sigma Planning Corporation, a registered investment advisor.

				
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