Your future workout

Accident benefits/bodily injury insurance
Unless an accident happens at or on the way to work, you’ll usually be left empty-handed. While statutory health insurance covers the costs of acute treatment, it doesn’t necessarily cover additional costs caused by the accident. This could include expenses for medical aids, necessary alteration or rebuild to your home, or pension benefits as a result of permanent disability.

Actual cash value
The cost of your insured item when new, taking off the loss of value due to age and condition (depreciation). This helps insurers work out how much to reimburse you in a claim.

Agent
A representative of an insurance company who sells their products and services. Must usually be licensed.

Annuity
Retirement income, giving fixed payments each month for as long as you live (or for a fixed period).

Beneficiary or beneficiaries
The person named on a life insurance policy, for example your partner or child, to receive any money if you die.

Benefit
The amount insurers will pay you if your claim is accepted.

Bond
Bonds are debt securities issued by corporations, governments, or other organizations and sold to investors. Because corporate bonds are typically seen as riskier than government bonds, they usually have higher interest rates.

Broker
An individual or company who sells insurance products from several different insurers of several different insurance companies. Must usually be licensed in the region they work.

Budget/Budgeting
A plan to track how much you’re earning and how much you’re spending.

Cash value
The amount a life insurer pays you if your policy is canceled – or if you die, the amount the beneficiary receives along with the value of the insurance policy.

Claim
Asking your insurer to pay you for a loss/event covered by your policy.  

Compound interest
Effectively interest on interest – money on top of both what you borrowed/invested and on the interest that has been added to it.

Coverage
The maximum amount of money insurers will pay you if you make a claim covered by your policy.

Credit
Receiving something now and agreeing to pay for it later. This often comes with interest payments, meaning you may pay more than if you’d bought the good or service up front.

Credit limit
The maximum amount you can borrow, subject to the time and interest agreed.

Credit rating
Calculating your ability to repay the money you’ve borrowed.

Death benefit 
How much insurers will pay your beneficiary if you die.

Debt
Money owed to an individual or organisation. Always check if there are fees for late or missed payments. More on the different types of loans below.

Deductible
How much you agree to pay for the claim before insurers pay the rest. The higher the deductible the lower the cost of your insurance, as you’ve agreed to pay for more of your loss.  

Deductions
Amount taken from your salary to cover things like tax, social security and pension contributions.

Deposit
Money paid upfront as a guarantee to buy an item, for example a car or a house. This will either form part of the overall payment or will be returned to you later.

Diversification
Investing in a few different ways to minimize risk and try to maximize rewards.

Excess
The part of your claim not covered by insurance. You agree this up front when you take out your policy.

Exchange-traded fund (ETF)
Typically, ETFs will track a particular index, sector, commodity, or other assets, but unlike mutual funds, ETFs can be purchased or sold on a stock exchange the same way that a regular stock can.

Exclusions
Things that aren’t covered by your policy. For example, certain types of water damage may not be covered in a home insurance policy, or certain claims if you travel to a high-risk country.

Expenses
Money you pay for a good or service. Normally either fixed expenses which are the same each month, for example your rent or mortgage. Or variable expenses, which changes each month, for example your food shop.

High dividend stocks
Stocks that regularly pay a high dividend to shareholders. Often an indicator of strong company performance.

Hire purchase
A type of credit that gives the buyer the goods but not the ownership until the credit instalments have been paid.

Inflation
An increase in prices and fall in the purchasing power of your money.

Insured
The person covered by the insurance policy.

Interest
A charge for borrowing money, as well as money you earn from keeping your money in a bank account. Often calculated as a percentage.

Investing
Buying into something you think will increase in value over time. But as you’d expect, this chance to grow also comes with risk.

Investors
An individual or group of people who put money into an organization to try and make money.

Leasing
Paying to use something over a period of time, for example land or a vehicle.

Legal
Legal expenses insurance (LEI) is to cover potential legal costs. LEI can be taken out on a before the event (BTE) basis either as a stand-alone product, or as an optional add-on cover to a home, motor or commercial insurance policy.

Loans
Borrowing money can come in different types of loans. A payday loan often has high-interest rates to encourage you to repay it quickly. A personal loan means you can do what you like with the money. A secured loan means the amount you borrow is secured with the thing you’re going to buy, for example a car or home.

Material facts
Things that could affect whether an insurer covers you or not – and if so, at what price. For example, smoking may affect your life insurance cost. It’s important to be honest here, as insurers can cancel your policy or not pay your claims if you haven’t told them upfront.

Mortgage
Loaning money to buy a property.

Pension
Giving you an income in retirement. Normally made up of a state pension – from the government based on social security contributions and paid when you reach state pension age – and a workplace pension – from your employer, based on contributions while working.

Policy
The contract between you and your insurer. It will include the cost of the policy, what you’re covered for, and how much you’ll receive in a claim.

Policyholder
The person who owns the policy. Normally the insured but not always.

Pre-existing condition
A medical condition you know about before applying for insurance.

Premium
The amount you pay to buy your insurance policy.

Protection
A way to cover yourself for unexpected events, for example life and health insurance.

Real Estate
Real estate is considered to be its own asset class. One of the key ways investors can make money in real estate is to become a landlord. A couple of the big barriers here are the amount you need to invest, as well as your money being tied down for a long period of time. But if you can do it, it can be a great way to secure your future.

Replacement value
The actual cost to replace your insured item, like for like.

Rider
Giving you protection for additional risks not covered in your policy. Sometimes known as an endorsement.

Risk
Chance that something you’re insured for, for example an accident or injury, will happen while your policy is in place.

Risk-averse
Uncomfortable with taking risks.

Shareholder 
Someone who owns shares in an organization.

Shares 
Buying a small stake in a company. Companies sell shares to raise money and grow the business. Meanwhile, investors (shareholders) can buy or sell these shares on the stock market.

Stock 
Stock trading involves buying and selling shares in publicly-traded companies. When someone buys shares of a company, they effectively become a small part-owner of that company and have some claim on its assets and earnings, in the form of dividends and/or capital appreciation.