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Glossary

This glossary is arranged in alphabetical order. Click on a letter in left column or scroll down to search.

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Marginal Tax Bracket:

The range of taxable income that is taxable at a certain rate. Currently, there are Four marginal tax brackets: 22.1%, 31.2%, 39.7%, and in BC 43.7%.

Material Fact:

This is something affecting a contract of insurance important enough to change the agreement between the company and the policyholder. Material facts must be disclosed if asked about. Failure to do so may result in a voiding of the policy involved. An exception to this general rule is that, with respect to ocean marine insurance, all material facts must be disclosed whether the insurer asks the appropriate question or not.

Medical:

A document completed by a physician or another approved examiner and submitted to an insurer to supply medical evidence of insurability (or lack of insurability) or in relation to a claim.

Medical Information Bureau:

This organization was established in 1902. The Medical Information Bureau (M.I.B.) is a non-profit association of life insurance companies. Its purpose is to detect and deter fraud by providing warnings called, alerts, to member companies. For example, if an insurance applicant advised one insurance company of a heart attack and then applied to another insurance company omitting this history, codes, reported by the first insurance company, indicating a discrepancy would alert the second insurance company to the undisclosed history, it would then be up to the second insurance company to make further inquires into the applicants health. It is a rarity, however, that the alert is the only notice of a specific medical impairment as most applicants completely disclose their history.

Misrepresentation:

An incorrect statement made about a material fact. Misrepresentation can be innocent, e.g., arising from an oversight; fraudulent (in other words, a deliberate untruth with intent to deceive) or the result of extreme carelessness where a statement is made without regard to whether it is true or false. When a misrepresentation is discovered, the insurer may either continue the contract or treat the contract as void with a full return of any premiums paid. In order for the insurer to successfully treat a policy as void, the misrepresented fact must be material to the risk.

Money Market Fund:

A mutual fund, whose investments are in high-yield money market instruments such as federal securities, GICs and commercial paper. Its intent is to make such instruments, normally purchased in large denominations by institutions, available indirectly to individuals. An investment in the Fund is not insured or guaranteed by the Canadian Deposit Insurance Corporation (CDIC) or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.

Money Laundering:

Popular term used to describe the process whereby criminals conceal illicitly acquired funds by converting them into seemingly legitimate income. The process is designed in whole or in part to conceal or disguise the nature, location, source, ownership or control of money (can be currency or equivalents, e.g., checks, electronic transfers, etc.) to avoid a transaction reporting

While the term refers to the proceeds of organized crime generally, it is now most often associated with financial activities of drug dealers who seek to launder the large amounts of cash generated from the sale of narcotics.

Mortality Charge:

The charge for the element of pure insurance protection in a life insurance policy.

Mortality Cost:

The first factor considered in life insurance premium rates. Insurers have an idea of the probability that any person will die at any particular age; this is the information shown on a mortality table.

Mortality Rate:

The number of deaths in a group of people usually expressed as deaths per thousand.

Mortality Tables:

Mortality tables are statistics that show how long people are expected to live at certain ages and under various situations (women longer then men, smokers shorter than non-smokers, etc.) Companies use mortality tables to calculate the cost of insuring you at a specific age.

Morbidity Tables:

These are statistical tables used by life insurance companies showing the probability of disease of male and females at all ages. These tables are used in the purchase of disability insurance and critical illness insurance.

Mortgage Insurance:

Mortgage Insurance is a form of Life Insurance…. its purpose is to provide financial protection for dependent survivors in the event of the death of a mortgage payer.
Most people are first introduced to the term “Mortgage Insurance” when they enter into a Mortgage Loan Agreement with a lending institution, be it a Bank, Trust Company or Credit Union. Mortgage Insurance is usually a type of “Term Insurance Product” with the death benefit decreasing in conjunction with the mortgage amount until zero mortgage payments are outstanding, the premium on the other hand remains level.

Municipal Bond:

This is a debt security issued by municipalities.

Mutual Fund:

A mutual fund is a pool of assets invested on behalf of investors. Mutual funds invest in a diversified portfolio of securities, which can include equity securities (such as common and preferred shares), debt securities (such as bonds and debentures) and other financial instruments issued by corporations and governments, according to the stated investment objectives of the funds. Individual investors own a percentage of the value of the fund as represented by the number of units they purchase. A collection of money invested in a group of assets and managed by an investment company (a mutual fund company or other). The money comes from investors who want to buy shares in the fund. The benefits to investors in buying shares of mutual funds come primarily from diversification, professional money management, and capital gains and dividend reinvestment.

Mutual Insurance Company:

Is an insurance company, which is owned by its policyholders who formed an association for the purposes of insuring one another against the possibility of fortuitous loss. Each policyholder pays a premium for his or her own policy. If at the end of the fiscal year the mutual insurance company declares a profit, the profit is shared amongst all the policyholders. If the company declares a loss there is also provision for the policyholders to be assessed a levy to make up for this shortfall.

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