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.

An open-ended vehicle operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Shares are issued and redeemed by the investment company on demand.

A company that does not have shareholders but is owned instead by its policyholders and/or clients.

This insurance policy covers all or part of your monthly mortgage payment, plus an extra amount to cover mortgage related expenses, for up to 12 months should you lose your regular income as a result of an accident, sickness or unemployment.

If a bank or building society agrees to lend more than its usual 'loan-to-value' limit on a property, they may take out insurance to cover the risk of default. Should it be necessary to repossess a property and the lender cannot recover the full amount of the original mortgage, the difference is covered by the insurance. The cost of the insurance is payable by the borrower and is covered by the MIG fee.

A loan secured against a property for the purpose of allowing you to purchase the property.

Also known as a Defined Contribution Scheme. A pension scheme where a member's retirement benefit level depends on the amount of contributions paid into the scheme by or for the member. The rate of contributions is decided by the policyholder and/or their employer.

This term mainly concerns a 'with profits' policy or investment offer by mutual friendly societies where you have to pay a penalty fee if you choose to cash in a policy early. This is also known as a Market Value Adjustment (MVA).

The value of a company measured by the total stock market price of its shares, calculated by multiplying the number of shares by the current share price.