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A procedure for making the effective date of a policy earlier than the application date. Backdating is often used to make the age of the consumer at policy issue lower than it actually was in order to get a lower premium.

Back To Back:

This term refers to the simultaneous issue of a life annuity with a non-guaranteed period and a guaranteed life insurance policy [usually whole life or term to 100]. The face value of the life insurance would be the same amount that was used to purchase the annuity. This combination of life annuity providing the highest payout of all types of annuities, along with a guaranteed life insurance policy allowed an uninsurable person to convert his/her RRSP into the best choice of annuity and guarantee that upon his/her death, the full value of the annuity would be paid tax free through the life insurance policy to his family members. However, in the early 1990's, the Federal tax authorities put a stop to the issuing of standard life rates to rated or uninsurable applicants. Insuring a life annuity in this manner is still an excellent way to provide guaranteed tax free funds to family members but the application for the annuity and the application for the life insurance are separate transactions and today, most likely conducted through two different insurance companies so that there is no suspicion of preferential treatment given to the life insurance application.

Balanced Mutual Fund:

A mutual fund whose objective is a return that is a combination of capital appreciation and current income, generally by building a portfolio of bonds, preferred stocks and common stocks. Such funds tend to be less volatile than stock-only funds.

Bear Market:

This is any market, in which stock prices are declining for a prolonged period, usually falling by 20% or more. A market participant who believes prices will move lower is called a bear. A news item is considered bearish if t is expected to produce lower prices


This is the person who benefits from the terms of a trust, a will, an RRSP, a RRIF, a LIF, an annuity or a life insurance policy. In relation to RRSP's, RRIF's, LIF's, Annuities and of course life insurance, if the beneficiary is a spouse, parent, offspring or grand-child, they are considered to be a preferred beneficiary. If the insured has named a preferred beneficiary, the death benefit is invariably protected from creditors.

Blue Chip Stock:

A term used to describe the stocks of major corporations, like IBM and General Motors. Equity ownership in highly regarded investment-quality companies that tend to be well established, older, and have the ability to pay dividends in good and bad years, and have a long history of growth dividend distribution. Blue-chip stocks tend to enjoy steady (although unromantic) growth in earnings as well as reputations for solid management, products, services, or all three.

The Dow Jones Industrial Average is based on 30 stocks, which are primarily blue chip stocks. The name is derived from the most highly valued poker chip, the blue chip.


When you invest in a bond you are lending money to a company or a government. The company or government issuing the bond promises to repay the money according to a specific rate and payment schedule. Bonds are usually issued in multiples of $1,000.

Book Value:

Is the net value of a company's assets, less its liabilities and the liquidation price of its preferred issues. The net asset value divided by the number of shares of common stock outstanding equals the book value per share, which may be higher or lower than the stock's market value.

Bull Market:

A bull market occurs when almost all stock prices are on the rise. A good example would be if the market advances 19% on both the Dow Jones Industrial Average and the Standard & Poor’s 500 over any timeframe. These markets, which can last several months to years, tend to be characterized by high trading volume. The term bull market comes from the image of a bull flinging things into the air with his horns.

Business Insurance:

This is a form of insurance concerned primarily with the protection of an insured's business or vocation. Business insurance protects a business against the loss of its valuable lives or key personnel; stabilizes the business through the establishment of better credit relations; and provides a practical plan for the retirement of business interest in the event of the death of one the owners.

Business Interruption Insurance:

Covers fixed expenses and the loss of profit in the event physical property is damaged by a named peril; requires that the business be shut down in whole or in part as a direct result of the named peril.

Buy/Sell Agreement:

Is sometimes referred to as a business will, it is an agreement entered into by the owners of a business to define the conditions under which the interests of each shareholder will be bought and sold. The agreement sets the value of each shareholders interest and stipulates what happens when one of the owners wishes to dispose of his/her interest during his/her lifetime as well as disposal of interest upon death or disability. Life insurance, critical illness coverage and disability insurance are major considerations to help fund this type of agreement.

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