IFA Jargon Buster

The world of finance can be confusing. If you're unsure of some technical terms, explore our handy jargon buster to see the definition.

Pays a lump sum of money to an individual if they are found to suffer from one of a range of designated illnesses (normally including cancer, heart attack or strokes). When an illness requires you to stop working for some time, having this insurance means financial worries are eased: normal practice is to have sufficient insurance to cover your mortgage and provide an income for a year or two.

An enquiry made on the credit history of an applicant, normally by reference to one of the major credit agencies.

A tax applying to limited liability companies, charged on the company's profits.

A form of investment offered by a company in order to raise capital, where the lump sum is repaid with interest at maturity. These bonds can be bought and sold on the stock market.

The process by which an individual can elect to stay in or opt-out of the State Second Pension (S2P), formerly known as the State Earnings Related Pension Scheme (SERPS).

Insurance taken out to cover your possessions. This may include cover against loss or damage away from the home.

Insurance of loss following direct damage, e.g. loss of profits, loss of use insurance or business interruption.

The point at which the legal formalities of a property purchase or mortgage are finalised and the funds released by the lender.

One method by which independent financial advisers or insurance brokers are paid by an insurance company for placing business with them.

A 'same day' payment transfer of funds from one bank account to another.

A facility for members of personal pension schemes to have their annual contribution, or part of it, treated as being paid in the previous tax year.

A mortgage where the interest rate charged by the lender never rises above a specified rate - the 'capped rate'. If the variable rate drops below the capped rate, you pay the variable rate instead.

A mortgage in which monthly repayments consist of instalments of 'capital' (the amount of money you have borrowed), as well as interest.

An increase in the value of shares or other assets in a fund.

A tax payable on profits made on the sale of assets (such as investments) or property, other than your home.

A lump sum of money.