Universal Life Insurance

Universal Life Insurance

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.

Equity-Indexed Universal Life Insurance

Equity-Indexed Universal Life Insurance

A permanent life insurance policy that allows policyholders to tie accumulation values to a stock market index. Indexed universal life insurance policies typically contain a minimum guaranteed fixed interest rate component along with the indexed account option. Indexed policies give policyholders the security of fixed universal life insurance with the growth potential of a variable policy linked to indexed returns.

Variable Universal Life Insurance - VUL

Variable Universal Life Insurance - VUL

A form of cash-value life insurance that offers both a death benefit and an investment feature. The premium amount for variable universal life insurance (VUL) is flexible and may be changed by the consumer as needed, though these changes can result in a change in the coverage amount. The investment feature usually includes "sub-accounts," which function very similar to mutual funds and can provide exposure to stocks and bonds. This exposure offers the possibility of an increased rate of return over a normal universal life or permanent insurance policy.

Private Mortgage Insurance - PMI

Private Mortgage Insurance - PMI

A policy provided by private mortgage insurers to protect lenders against loss if a borrower defaults. Most lenders require PMI for loans with loan-to-value (LTV) percentages in excess of 80%. This allows the borrower to make a smaller down payment of as low as 3%, instead of about 20%, and usually requires an initial premium payment and possibly an additional monthly fee depending on the loan's structure. Some of the well-known mortgage-financing companies offering private mortgage insurance products in India are as follows - LIC Housing Finance HDFC ICICI Home Finance SBI Housing Finance UCO Bank Allahabad Bank United Bank of India Kotak Mahindra Bank Citi Bank Standard Bank HSBC

Mortgage Life Insurance

An insurance policy designed specifically to repay mortgage debt in the event of the death of the borrower. These policies differ from traditional life insurance policies in that, for a traditional policy, the death benefit is paid out when the borrower dies; however, a mortgage life insurance policy doesn't pay unless the borrower dies while the mortgage itself is still in existence. There are two basic types of mortgage life insurance: decreasing term insurance, where the size of the policy decreases with the outstanding balance of the mortgage until both reach zero; and level term insurance, where the size of the policy does not decrease. Level term insurance would be appropriate for a borrower with an interest-only mortgage. Before buying mortgage life insurance, one should carefully examine and analyze the terms, costs and benefits of the policy and there are two lifespans to consider – borrower’s lifespan and the mortgage's.

Fully Funded Documentary Letter Of Credit - FFDLC

Fully Funded Documentary Letter Of Credit - FFDLC

A written promise of payment provided by a buyer to a seller that is guaranteed to clear by a particular bank. Once an FFDLC document is presented by the seller to the involved bank, the bank is obliged to remit full payment to the seller. The seller may be required to fulfill certain conditions, such as providing proof of shipment of the goods sold to the buyer, before collecting payment from the bank. This method of payment provides assurance to the seller that the buyer has the necessary funds for the transaction and ready for remittance to the seller upon completion of the sale.

Sight Letter of Credit

Sight Letter of Credit

A letter of credit that is payable once it is presented along with the necessary documents. These letter of credits require a more stringent process of verification.

Irrevocable Letter Of Credit

Irrevocable Letter Of Credit

A letter of credit that can't be canceled. This guarantees that a buyer's payment to a seller will be received on time and for the correct amount. This is often used in international transactions.

Standby Letter of Credit - SLOC

Standby Letter of Credit - SLOC

A guarantee of payment issued by a bank on behalf of a client that is used as "payment of last resort" should the client fail to fulfill a contractual commitment with a third party. Standby letters of credit are created as a sign of good faith in business transactions, and are proof of a buyer's credit quality and repayment abilities. The bank issuing the SLOC will perform brief underwriting duties to ensure the credit quality of the party seeking the letter of credit, then send notification to the bank of the party requesting the letter of credit (typically a seller or creditor).