Glossary of Terms

Key Insurance and Investment terms explained

Active Fund Manager

A fund manager who manages a fund by selecting and combining a group of instruments that he/she believes are mispriced, in the belief that by so doing they can successfully outperform a given benchmark.


Accidental Bodily Injury

An injury to a person's body as a result of an unexpected, unintentional, unfortunate event outside of your control.


Accident and Disability Insurance

Insurance that covers you in the event of accidental death or disability.


Accident

An unexpected, unintentional, unfortunate event outside of your control.


Ab Initio

A Latin term meaning from the start.


Ancillary Benefits

Benefits that supplement or add to your main benefit but that result from the same action.


Anniversary date

The anniversary of the day on which a Living Annuity policy was first issued.


Annual Benefit Increase

The amount by which your benefit goes up each year.


Annual Premium Increase

The amount by which your premium goes up each year.


Assign

To transfer your rights and responsibilities under the policy to someone else.


Authorised Representative

An individual who has permission to act on someone else's behalf. In the context of FAIS, this is an individual or entity who has permission to act as a FAIS representative.


Automatic Premium Increases

The amount by which your premium goes up each year automatically.


Benchmark

A standard against which the performance of a unit trust, portfolio, fund manager or fund can be measured.


Beneficiary

A person or entity that you choose to receive the benefit on your death.


Beneficiary For Ownership

A person or entity that you choose to replace you as the policyholder on your death.


Benefit

In relation to Retirement Funds, means any amount payable in terms of the rules of the Retirement Fund. A Benefit may be paid on withdrawal, retirement or the death of the member, and may be awarded to a non-member spouse in the event of a divorce.


Bond

An interest-bearing debt instrument that governments traditionally issue when it does not have enough money to pay for its expenses.


Business Insurance

Insurance that covers a business and its assets in order to protect itself against possible losses.


Capital Gain

The profit that is made if you sell an asset for more than you bought it.


Car Insurance

Insurance that covers your car against theft or damage as a result of an accident.


Car Insurance Cover

The value to which your car is covered by your car insurance policy in the event of a claim.


Cash

An investment that is made in instruments such as a savings account, a fixed-deposit account or a money market account.


Cede

The transfer of rights in a policy to another person or entity.


Cession

The transfer of rights in a benefit (collatarel cession) or to a benefit (absolute cession).


Cessionary

The person or entity to whom you have transferred your rights in a ceded policy.


Claimant

A person who makes a claim in order to receive benefits.


Claims Free Period

A period in which there are no claims


Collateral Cession

Transfer of rights in a benefit.


Collective Investment Scheme (CISs)

Investment schemes in which investors’ funds are combined together and managed by professional managers. CISs offer protection for the individual investor as they are regulated, and they also offer diversification benefits.


Commencement Date

The date from which you're covered under your insurance policy. Also known as a start date.


Commercial Insurance

Insurance that covers a business or commerical entity and its assets against possible losses.


Compound Interest

The interest earned on interest.


Comprehensive Car Insurance

Insurance that gives maximum protection for your vehicle by covering you against damage incurred in an accident, fire or natural disaster. It also provides cover for theft, criminal damage and third party vehicle damage or injury.


Consequential Loss or Damage

Loss or damage that is a consequence of other loss or damage. For example, if your geyser bursts and you have to miss a client appointment because you're waiting for the plumber, you'll lose out on income which is seen as consequential loss.


Consumer Price Inflation (CPI)

A measure of the change in the price of a standardized basket of goods and services that are consumed by South African households.


Contribution

The money that you as a policyholder pay to a financial company or insurer for the product set out in a policy.


Corporate Assets Insurance

Insurance that cvers your business assets such as buildings, tools, plants, machinery, contents and stock from fire, theft, burglary, flooding, subsidence and other such risks.


Coupon

A periodic payment that is made to a bondholder, during the time between the issue of the bond and its maturity date.


Credit Spread

The difference in the yields of different instruments that is due to the differences in their perceived riskiness.


Data Collection Device

A device that is fitted to your vehicle to collect information needed to calculate your car insurance premium.


Deduction

An amount the insurer will take off before your insurance policy covers the rest of your claim. Also known as a deductible.


Dependant

Someone who relies on someone else for financial support.


Disability Insurance

Insurance that provides cover in the event of you becoming disabled.


Domicile

The country where your permanent home is, even if you are living elsewhere at the moment. Note: domicile refers to your permanent home, whereas territorial limits refers to the geographical limits within which you are covered by your insurance.


Domicilium Citandi Et Executandi

A Latin term meaning the address where you agree to accept notices and legal processes, for example documents and summonses.


Double Debit

If we are unable to collect a premium from your bank account in any month, we will collect twice the amount in the following month.


Duration

A measure of the change in the price of a bond relative to the change in interest rates. For example, if interest rates rise/drop by 1%, a fund with a 5-year duration is likely to lose/gain about 5% of its value.


Endorsement

A change to a policy that you are notified of in writing. This change or endorsement will replace the relevant section of the previous policy.


Endowment Policy

A type of insurance policy that pays out a lump sum at a specified future date.


Excess

The amount you are responsible for paying when the cost of loss or damage is more than the amount your policy covers.


Excess Premium

An extra amount you pay each month that allows you to pay no excess or a lower excess.


Exclusions

A loss or risk that a policy does not cover.


Extended Warranty

When a factory guarantee ends, you can pay extended warranty in order to prolong your guarantee.


FAIS

Financial Advisory and Intermediary Services (FAIS). An independent body that resolve disputes between financial services providers and their clients in a fair, informal, econonomical and efficient way.


Financial Advisor

A representative of an authorised FSP, who is authorised to provide advice and/or intermediary services and has been appointed in such capacity by the investor.


Financial Needs Analysis

A process where questions are asked to find out what your insurance needs are.


Financial Planning

Savings and investment plans that insure your long term financial security.


Financial Services Provider (FSP)

An entity authorised by the Financial Services Board to provide financial services to clients in the form of advice and/or intermediary services.


Fixed Asset

Goods that cannot be moved, for example a building.


Fixed Monthly Premium

The fixed amount set by the insurer that you pay each month in exchange for insurance cover.


Fund Management Fee

Fees for managing funds, which are calculated as a percentage of the value of the investments in question.


Fund Manager

An individual who is responsible for the implementation of a fund’s investment strategy and process; the monitoring, management and reporting on the investments that have been included in the fund.


Funeral Insurance

Insurance that covers you against the costs associated with your own funeral, or the funeral of a family member.


Future Benefit Values

The value of the benefit at a specified date in the future.


Gilts

Bonds issued by central governments.


Grey Parts

Goods that come from an unauthorised or unofficial supplier.


Gross

The total sum before x has been taken off.


Guaranteed Growth

A Hollard investment product that is a five-year savings plan with a guaranteed return and tax advantages.


Guaranteed Income

A Hollard investment product that gives a guaranteed monthly income with tax advantages.


Hollard Retirement Annuity Fund

An independent legal entity registered in terms of the Pension Fund Act, which provides a tax-efficient method to save for retirement as an alternative to or in addition to saving via an employer pension or provident fund. 


Hospital Cash Back Plan

A plan designed to pay you a daily benefit for each day you spend in hospital. This money can be used towards the surprise expenses that can be incurred during your stay in hospital.


Hospital Cover

Insurance that covers your costs or a percentage of your costs should you be admitted to hospital. The amount you are covered for depends on your policy and benefits relating to your hospital cover.


Hospital Insurance

Insurance that covers your costs or a percentage of your costs should you be admitted to hospital. The amount you are covered for depends on your policy and benefits relating to your hospital cover.


Household Contents Insurance

Insurance that covers your household goods against loss, damage or theft.


Income and Expense Account

A nominated investment portfolio from which an investor in the Hollard Investment product range may choose to have annual administration fees, annual Financial Advisor fees and your income payments as applicable deducted.


Income Distribution

The payment that is received from the portion of income that is earned by an investment asset and available for distribution.


Indemnity Insurance

Insurance to cover someone's legal responsibility.


Independent Financial Adviser

A qualified person or firm that acts independently of any insurance or investment company and gives people advice on financial products from different companies.


Inflation-Linked Bond (ILB)

A bond whose value and return depend on the level of the CPI.


Insurance Broker

A third party agent that finds insurance quotes and insurance on behalf of others.


Insurance Portfolio

All the insurance policies in one policyholder's name.


Insurance Quotes

The predicted cost of an insurance policy.


Investment Horizon

The length of time that an investor expects to be invested in a fund. The investment horizon is used to determine the investor's income needs and desired risk exposure, which is then used to aid fund selection.


Investment Risk

The risk that you may not get back as much as you expected from your investment policy, or that you lose capital.


Investment Portfolios

The selection of Unit Trust Funds and other investment options offered within the Hollard Investments products, as amended from time to time.


Judgments

A decision by a court that describes the rights and obligations of both parties in a lawsuit.


Juristic Representative/Person

A person or entity who can enter into a contract.


Lapse

The ending of a policy because certain conditions have not been met, for example if premiums have not been paid.


Legal Insurance

Insurance that covers the cost of any civil, labour or criminal cases in which you are involved.


Legal Plan

Hollard's legal insurance product that protects you against any civil, labour or criminal cases you may find yourself facing.


Liabilities

The amounts of money or other responsibilites that a person or organisation owes.


Liability Insurance

Insurance that protects an individual or business from liability for injury, negligence or malpractice.


Liable

Responsible.


Life Cover

Insurance cover that pays out in the event of loss of life.


Life Insurance

Insurance cover that pays out in the event of loss of life.


Limitation

The maximum amount that an insurance company will pay out for benefits.


Linked Investment Service Provider (LISP)

A financial institution that packages, distributes and administers a broad range of unit trust investments. LISPs give the client a single entry point to a selection of investment options.


Living Annuity

An investor-owned compulsory annuity policy, issued under the provisions of the Long-term Insurance Act, No. 52 of 1998, as amended. The portfolio is intended to provide a regular income to investors who have retired.


Living Annuity Income

The annuity income which is paid from Living Annuity investments at the level and payment frequency specified by the investor.


Mandate

Permission to act on behalf of the policy holder.


Maturity / Maturity Date

The date when the policy ends and funds are paid out to the policyholder.


Mechanical Coverage

Insurance taken out to cover potential loss or damage as a result of mechanical breakdown. Examples include a broken fanbelt or a seized gearbox.


Medical Attendant

A doctor trained and authorised to give medical attention.


Memorial Benefit

An extension to the Hollard funeral plan that covers you against memorial expenses one year after the funeral has taken place.


Money-Market Investment

An interest bearing instrument that has an investment horizon of less than one year.


Monthly Provider

An extension to Hollard's funeral insurance that gives you cash to cover everyday expenses in the event of your or your partner's death.


Motor Insurance

Insurance for private or business motor vehicles.


Motor Xtender

A Hollard insurance product that covers you against the costs of unforeseen mechanical breakdown with your car.


Motorcycle Insurance

Insurance that covers your motorcycle against theft or damage as the result of an accident.


Multi-Manager Fund

A fund whose underlying assets are managed by more than one fund manager.


NAV

The net asset value is a measure of the value of each unit of a unit trust. It is determined by dividing the value of a unit trust portfolio into identical units with the same value that changes daily.


Needless Exposure to Danger

If you put yourself in danger unnecessarily.


Net

The amount that is left over after expenses or deductions have been made.


Outperformance

The act of producing a return that is better than the return that has been delivered by a benchmark. It is also known as “excess return”


Paid Up

When a policy has a value and we no longer receive premiums for the policy.


Paid Up Value

The value of the policy or benefit after the policy is paid up.


Pay As You Drive

A Hollard car insurance product where you pay only for the number of kilometres you drive.


Pension Preservation Fund

An independent legal entity registered in terms of the Pension Fund Act, which is intended to preserve retirement money received from an employer’s pension fund when leaving their employ. The investment is preserved until retirement, at which time the member will receive a retirement benefit.


Personal Accident Benefit

A feature of the Hollard funeral plan that gives you a cash pay out in the event of accidental death or disability.


Personal Accident Insurance

Insurance that covers you in the event of accidental death or disability.


Pet Insurance

Insurance that covers you against medical expenses should your pet become ill or be involved in an accident.


Physical Impediments or Infirmities

A physical disability that puts you at a disadvantage.


Policy Schedule

Information about the people who are insured as well as the amount of insurance and any specific terms and conditions.


Policy Wording

The terms and conditions that are set out in your policy.


Policyholder

The person or organisation that owns the insurance or investment policy.


Preferred Option

The first choice when given more than one option.


Pre-Inspection

The initial check or examination of goods or properties to calculate the amount of insurance cover that is necessary.


Premium

The money a policyholder pays to an insurance company in return for the insurance benefits set out in the policy.


Premium Pattern

The way that benefit and premium increases are worked out over the period of your policy.


Preservation Fund

A retirement plan specifically designed for investors wanting to preserve their retirement savings.


Preservation Pension Fund

A retirement fund that allows you to claim up to one third of your total benefit as a cash lump sum upon retirement.


Preservation Provident Fund

A retirement fund that allows you to redeem the full value of your retirement savings in cash upon retirement.


Private Wealth Porftolio

A cost-effective and tax-efficient Hollard investment product that's ideal for high net worth investors looking for long term growth.


Pro Rata

A Latin term meaning in the same proportions.


Professional Indemnity Insurance

A type of insurance designed to protect a business against any claims arising from bad or negligent advice or services.


Provident Preservation fund

An independent legal entity registered in terms of the Pension Fund Act, which is intended to preserve retirement money received from an employer’s provident fund when leaving their employ. The investment is preserved until retirement, at which time the member will receive a retirement benefit.


Regulation 28

Pension Fund legislation that limits the extent to which the members of a Retirement Fund may be invested in various asset classes. For example, a maximum of 75% of a Retirement Fund investment may be invested in equity instruments.


Rescind Judgment

A judgement or legal decision that is cancelled and declared invalid.


Resultant Damage

Loss or damage that results from other loss or damage. For example, if your geyser bursts causing the ceiling to be damaged, the damage to the ceiling is resultant damage.


Retirement Funds

A Fund approved by the Registrar in terms of the Pensions Funds Act which allows investors to save for retirement in a regulated and tax-efficient manner. Retirement Funds include Retirement Annuity Funds, Pension Funds, Provident Funds and Preservation funds.


Retirement Planning

A long term savings plan that provides ongoing funds to you when you are retired.


Risk Finance

A product that provides funds to cover unexpected losses experienced by an organisation.


Safe and Secure

A Hollard investment product that allows you to benefit from superior wealth preservation and long term investment performance without being exposed to unnecessary risk.


Savings and Investments

Long term savings plans that include retirement planning, guaranteed investments and endowments.


Specialist Insurance

Tailored insurance for specific industries such as marine, engineering, accident and health, and art, antiques and collectables.


Surrender

To end or cancel your insurance policy. Note that this action may have certain financial penalties attached.


TER

The total expense ratio is a measure of the total management and operating costs associated of an investment fund. It is calculated as the total costs of a fund divided by the fund's total assets.


Third Party Insurance

Car insurance that only covers a third party rather than your own vehilce agains loss or damage in the event of an accident.


Third Party, Fire and Theft Insurance

Car insurance that covers you against theft and gives you limited cover against damage caused to a third party in the event of a motor accident.


Total Return

Total return is the sum of the change in the price of an instrument and the income received.


Travel Insurance

Insurance that provides cover against the financial losses that may happen during a personal or business trip.


Trust

A financial arrangement under which property is controlled by certain people (called trustees) for the benefit of others. These trustees are considered to have the necessary knowledge and expertise to make sound financial decisions.


Trustees

A Board of Trustees appointed by a Retirement Fund who is responsible for the management and control of the Fund and its operations, and the protection of member interests, in accordance with the Fund Rules and the relevant legislation.


Unit Trust

Unit trusts are the most common form of a CIS. The funds of individual investors are combined and invested across a range of different instruments.


Vehicle Access Benefit

Part of the Hollard funeral plan that gives you access to a vehicle to arrange a funeral and transport guests.


Volatility

A measure of the bounciness of the change in the price of an instrument.


Waiting Period

A period in which no claims can be made.


Waive

Give up the right.


Wealth Accumulator

A Hollard investment product that is designed for your long-term savings and increasing your capital.


Without Admission of Liability

Without admitting that an insurer is responsible.


With-Profit Policy

An investment policy that smoothes investment returns so that there are fewer short-term ups and downs in the policy value.


Yield

The percentage income return on an instrument. It refers to the interest from an instrument divided by the current value of that instrument.