- FACE AMOUNT
- The amount of insurance provided by the policy at death or maturity.
- FACULTATIVE REINSURANCE
- A type of reinsurance that allows a reinsurer to accept or reject any risk that is presented to them by an insurance company. Also see automatic reinsurance.
- FAMILY POLICY
- A health insurance policy that insures all the members of a family for medical expenses.
- FEDERAL NATIONAL MORTGAGE ASSOCIATION
- This publicly held corporation is a major source of home mortgage funds. The FNMA or Fannie Mae, purchases conventional and insured mortgages from governmental agencies such as the Federal Housing Administration (FHA) and the Veterans Administration (VA). They intern issue debentures, short-term notes and mortgage-backed securities. Also see FNMA Home Page.
- FEDERAL FLOOD INSURANCE
- A form of insurance designed to reimburse property owners from loss due to the defined peril of flood. The insurance is offered through the Federal Emergency Management Association (FEMA). The coverage is available through licensed agents. Also see FEMA Home Page.
- FEE SIMPLE OWNERSHIP
- A form of individual property ownership where the individual owes all of the property including the right to pass the property to the owner's heirs.
- FELLOW CASUALTY ACTUARIAL SOCIETY (FCAS)
- A professional designation of the Casualty Actuarial Society that is earned by passing 10 examinations. The examinations include mathematics of property and casualty insurance, actuarial science, insurance accounting and finance.
- FELLOW LIFE MANAGEMENT INSTITUTE (FLMI)
- A professional designation of the Life Office Management Association earned by passing 10 examinations. The examinations include insurance, marketing, law, information systems, management, employee benefits, insurance accounting and finance.
- FELLOW SOCIETY OF ACTUARIES (FSA)
- A professional designation of the Society of Actuaries earned by passing 10 examinations. The examinations include mathematics of life and health insurance, actuarial science, insurance accounting, finance, and employee benefits.
- FINANCIAL RATIOS
- The most common financial ratios are as follows. Definitions for these terms appear in their normal alphabetical sequence in this listing.
- FIRST-YEAR COMMISSIONS
- The commission payment made to an insurance agent that is based on the premiums paid in the policy's first year.
- FIXED AMOUNT OPTION
- A type of death benefit settlement option in a life insurance policy that pays the death benefit in a series of fixed amounts. The death benefit is left on deposit with the insurance company and earns interest. The insurance company makes payments of the specified amount until the benefit and interest has been exhausted.
- FIXED DOLLAR ANNUITY
- An annuity contract that guarantees to pay a specific monthly income benefit for a specific period of time or for the life of the annuitant. This amount is paid regardless of adverse changes in the investment returns, mortality experience and expenses of the insurance company.
- FIXED PERIOD OPTION
- A type of death benefit settlement option in a life insurance policy that pays the death benefit over a specific period of time. The insurance company makes payments of a predetermined amount for the specific period of time.
- FLAT EXTRA
- An additional premium on life or health insurance policies that is charged as a result of medical, occupational or avocational risks associated with an insured.
- FLOWER BONDS
- A type of bond that was issued by the US Treasury at a discount to par that can be redeemed at the owner's death by the heirs to settle estate taxes. These bonds were initially issued prior to 1971, with the last issue scheduled to mature in 1998.
- FOREIGN INSURER
- An insurance company that is licensed to sell insurance in the state where the policy is written but is formed under the laws in another state. Also see domestic insurer, and alien insurer.
- FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
- This investment vehicle involves an obligation to purchase or sell a specific currency at an agreed upon future date at a set price.
- A qualified retirement plan sponsored by an employer that allows employees to defer from income taxation a portion of bonuses and/or salary. Generally the employer will make a matching contribution to the plan. The salary reductions are 100% vested (can not be forfeited). The deferred funds are invested in the plan and the earnings are also deferred from current taxation. Generally the plan has several available options for investing.
There are substantial restrictions and tax penalties for withdrawals prior to retirement.
If the employee leaves the sponsoring company, the plan can be rolled over to an IRA or, in some cases, to the 401(k) of the new employer. In both cases, there is no tax consequence of the rollover and the plan continues to be tax deferred.
- A type of qualified retirement plan that is available to employees of public schools and tax-exempt organizations that use tax-deferred annuity or mutual funds. The plan is similar to a 401(K) plan and permits pre-tax contributions by employees to be made to an individual accounts. The contributions and income earned on the account are deferred from income taxes until withdrawn at retirement. There are income tax penalties, and possible plan penalties for early withdrawals. Some plans do permit loans.
- FREE LOOK PERIOD
- A right, in most states, that allows an insured to have 10 days to examine an insurance policy, and if not satisfied, to return it to the company for a full refund of the initial premium.
- FRONT-END LOAD
- An insurance or investment product where the sales charge is deducted at the beginning of the contract. For example, with a front-end load mutual fund with a 6% load, if $1,000 were invested, $940 would be invested in the fund after the $60 sales charge is deducted. Also see back-end load, no load, and low load.
- FUTURES CONTRACTS
- An agreement between the buyer and seller on the commodity exchange floor to buy or sell a specified amount of a commodity or other investment at a contracted price and on a specified future date.
- FUTURE VALUE OF A SERIES OF PAYMENTS
- The value, at a given future date, of a series of deposits of money that are deposited at a predetermined interest rate. An example of how this is used is in the calculation of the value of an IRA where $2000 per year is deposited for the next 20 years at 8%.
- FUTURE VALUE OF A SINGLE SUM
- The value, at a given future date, of a single amount of money that is deposited at a predetermined interest rate. An example of how this is used is in the calculation of the value of a certificate of deposit at its' maturity.